Since its inception in 1946, the World Bank has had 12 presidents, each of them an American. The practice of choosing an American for the job has gone unopposed given that the U.S. has been the world’s biggest donor nation. Similarly, the Europeans traditionally pick one of their own to run the IMF. This arrangement is known as a “gentleman’s agreement”.

But this year there’s a wrinkle in the World Bank process. A battle is underway among three candidates vying to succeed the incumbent president, Robert Zoellick, whose term ends in June.

Two of the candidates are economists from emerging markets: They are Nigeria’s Finance Minister Ngozi Okonjo-Iweala, who was previously a managing director of the World Bank. And, former Colombian finance minister and Columbia University professor, Jose Antonio Ocampo.

The third candidate, nominated by the White House, is Korean-born American, Jim Yong Kim, President of Dartmouth College and an HIV/AIDS expert. As an anthropologist and physician, rather than a banker or economist, Dr. Kim doesn’t fit the mould of prior World Bank leaders which may not be a bad thing.

Stakeholders outside the U.S. and Europe want to break the tradition of automatically slotting an American in the job. In a world now influenced to a greater extent by the rise of emerging economies, they say that it’s time to re-examine the Bank’s strategic role. The real question is, which nominee can best serve the interests of the Bank and its client countries in a multi-polar world?

American calculus

Unfortunately, the prospect of breaking the gentleman’s agreement seems improbable given that the U.S. is coming into its election season. It’s far more likely that the White House will use its clout — holding the most votes on the Board of Governors — to press hard for its nominee.

Alan Beattie, international economics editor at the Financial Times, quoting an unnamed World Bank official, said: “In a U.S. election year, and given the need to do nothing to upset Congress by appearing weak internationally, the strong feeling around the Bank is that the White House will absolutely insist on getting its way.”

The Obama team knows that if an American isn’t appointed, precious political capital will be spent defending the president  from charges of weakness by his opponents. But, by taking the politically expedient step, the White House is closing the door on a rare opportunity.

Features and benefits

Each of the candidates brings distinctive attributes, but Dr. Okonjo-Iweala is uniquely qualified. She has the experience, skills and perspective to recalibrate the Bank for the multi-polar era. By selecting a capable African woman to run an institution that has a central role in the developing world, the Bank has an opportunity to renew its covenant with client countries.

Raised in a time of conflict and deprivation, she’s become a battle-tested reformer of her nation’s institutions. She’s won some skirmishes and lost others, but she’s never walked away from confrontations.

She has valuable insider knowledge gained in her earlier stint at the World Bank. Knowing the institution from both the inside and outside is an advantage that her competitors can’t match.

As both a two-term finance minister and an economist, Dr. Okonjo-Iweala recognizes that reducing poverty comes from generating economic growth, requiring tough choices in emerging countries where governments have a preponderant role. She knows that the Word Bank has a vital role to play in that mix.

She noted that the Bank must address three challenges confronting client countries in “ways that respect their priorities, their culture and their own processes.” She said, “These three major challenges – creating jobs, investing in the human capital of the poor and building institutions – have to be pursued with vigor.”

The BBC reported, “The three-way fight is attracting increasingly passionate comment from candidates’ supporters. It has also shone a light on the way the World Bank chooses its head.”

The fact that this battle exists at all is proof that a shift in thinking among stakeholders has already occurred. The World Bank now finds itself at a critical junction. One thing is clear: the era of the gentleman’s agreement has passed. A transparent, merit-based selection process is in the stakeholders’ best interests.

***

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___________________________________

More on this subject?

• World Bank officials and observers weigh in on the selection process at the Bank’s site,
• Here’s an essay in the Economist, Hats Off to Ngozi,
• And my 2011 piece about Okonjo-Iweala (“The Disruptor”).

Addenda, 4/15/12:

• Okonjo-Iweala appeals to ‘cherished values’ Post by CDG’s Lawrence MacDonald,
• Does it matter who runs the World Bank? Post by CDG’s Nancy Birdsall,
• Dr. Okonjo-Iweala interviewed on Fareed Zakiria GPS (aired 4/15/12).

Post-script – The selection of Dr. Kim was announced on 4/16:

• BBC piece (4/16): “Africa’s World Bank Hopes Dashed as Okonjo-Iweala loses,”
• NYT article (4/16): “World Bank Officially Selects Kim,”
• Economist piece (4/16): “Kim for President”.

Related:

• Council on Foreign Relations piece (4/18): “The World Bank Group”

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Stretching from Morocco to Oman, MENA’s population tops 350 million, making it the world’s ninth largest market. But trade barriers among countries in the region have constrained market growth.

Now, an emerging trend is disrupting MENA’s traditional market patterns: a growing segment of urbanized, tech-savvy Arab youths is devouring on-line entertainment, gaming and social media, creating demand for digital services that are delivered across borders.

Despite differences among the region’s nations, its shared language and culture gives rise to a homogenous market that spans the breadth of the Arab world. With over 100 million people between the ages of 15 and 29, many of whom are economically active, the promise of the Arab digital market is sparking the interest of investors and entrepreneurs.

The popularity of social media in the region was highlighted during the recent Arab uprisings. The news was dominated by stories about how social media was used to mobilize demonstrators, but, in fact, MENA’s youths have been consuming a wide array of digital media.

The precursor to MENA’s digital sector is the successful Arab satellite TV industry — dominated by Qatari-owned Al-Jazeera and Saudi-backed Al-Arabiya. In the last decade, Arab-based TV has matured and expanded, delivering content through several outlets, including the Internet, to audiences around the world.

Like its satellite TV analog, the Arab digital market’s fundamentals are strong. In addition to its positive demographics, mentioned above, MENA’s internet usage has already reached 187 million from 10 million only a decade ago (source: TNS MENA). Mobile broadband penetration is rising quickly due to the adoption of LTE standards in the UAE and Saudi Arabia, and an explosion of smartphones and tablets.

As with any emerging sector, there are challenges. Monetizing digital media relies mostly on advertising, which has been undervalued in the region. Whether some type of pay model could work in the future is an open question.

MENA 2.0 is still in its infancy, but major international players have already arrived including Yahoo!, which bought Maktoob, a Jordanian portal; Google, which launched in the UAE, Egypt and Saudi Arabia; and Livingsocial, which acquired Dubai-based GoNabit.

One of the more intriguing features of the Arab digital market is the brisk pace of innovative ideas bubbling up from local platform, app, and content developers. For investors and entrepreneurs, the medium to long-term prospects look bright.

MENA 2.0 could transform the region, creating new business opportunities, youth employment and economic growth. It’s an exciting space to watch, and one that’s worth a closer look by anyone interested in what’s coming next.

***

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Notes:

MENA refers to the following countries in the Middle East and North Africa: Algeria, Bahrain, Egypt, Iraq, Jordan, KSA, Kuwait, Lebanon, Libya, Morocco, Oman, Palestine, Qatar, Sudan, Syria, Tunisia, UAE and Yemen.

Regional macroeconomic data from the IMF’s World Economic Outlook report and the World Bank’s MENA resources.

Want more info on this subject?

Arab Net, a conference for MENA’s digital services sector. More on Arab Net from All Things D.

Vali Nasr’s ’09 book, Forces of Fortune – The Rise of the New Muslim Middle Class and What It Will Mean for Our World.

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 Cause for Hope

Good news continues to stream in about the unprecedented growth and stability of Africa’s frontier economies. The Economist, which ran a cover story in 2000 headlined, “The Hopeless Continent”, reversed course in December 2011, dubbing Africa, “The Hopeful Continent”.

Africa’s newer narrative is grounded in economics. In the last decade, six of the world’s 10 fastest growing nations have been in the Sub-Sahara, and that trend is expected to continue into the foreseeable future. The continent rebounded quickly from the global recession reaching 6% growth last year, surpassing East Asia.

Africa is too vast and diverse to be handled in a broad brush treatment. Each of its economies is affected by a unique and dynamic set of drivers.

However, on the whole, the Sub-Sahara is being shaped by converging forces: global demand for resources, burgeoning consumer markets and government reforms are placing the continent on a path toward sustainable growth. Regional trade and foreign investment are increasingly important. There’s cause for optimism and for a closer look at Africa’s Great Boom.

New seeds of growth

Historically, Africa experienced cyclical growth based on fluctuating prices of oil and other commodities. In recent years, steady demand for oil and other mineral resources has boosted growth. Today’s new sources of growth are more diverse and consumer-based.

Half of the continent’s new growth now comes from consumer services, namely mobile phones, banking (including m-banking) and insurance.  Consumer-led growth not only provides diversity to African economies, it accelerates cross-sector growth.

Africa, the world’s fastest growing mobile market with over 600 million mobile users, is second only to Asia in its number of subscribers. In each of the last five years, mobile penetration increased by 20% annually which has stimulated economic growth supporting a range of sectors that benefit from connectivity.

The London Business School found that an increase of 10 percentage points in mobile penetration boosts GDP by 0.6% in developing markets.

Indeed, mobile services encourage a more efficient mix of activities than would be undertaken in the absence of mobile services. Further analysis is needed to measure mobile’s contribution to regional growth, but arguably, it’s a game-changer throughout the Sub-Sahara.

More trade and investment 

Another new source of growth is intra-regional trade which has been historically insignificant. African governments are removing longstanding trade barriers and consolidating cross-border ties creating new trading partners and patterns. Intra-regional trade, still in its infancy, accounts for only 12% of commerce, but it’s poised to play a larger role in the future.

Foreign investment is also having an effect. Western firms are joining the influx of Chinese and a growing number of Indian companies competing in Africa. Local governments are making it easier for foreign firms to do business there. The World Bank and IFC’s annual assessment of commercial practices shows that 36 out of 46 African countries have reformed their foreign investment policies in the past year.

Challenges remain at the intersection of the government and the private sector where the pace of reform has been brisk but uneven. Although political patronage persists in some quarters, many governments have made strides in encouraging private investment, decentralizing service delivery and achieving greater transparency.

Despite its challenges, Africa’s prospects, on balance, are promising. Demand for natural resources, consumer-led growth and widespread institutional reforms are remodeling the continent. Foreign investment is increasingly important and will have a far greater impact in the future.

Foreign companies that are ready to come to the Sub-Sahara and roll up their sleeves will encounter confident, energized African business leaders who are convinced that this is, after all, Africa’s time.

 ***

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Image courtesy of Martin Power

More?

Helpful analysis and perspectives on this topic can be found at the following:

• The World Bank – Africa Blogs
• Africa Development Bank
• Center for Strategic & International Studies – Africa.

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Last July, Kenya became the first sub-Saharan country to launch an open data government site, enabling its citizens to gain access to vital information. After only six months, the Kenya Open Data Initiative (KODI) is still a work in progress, but it’s already reshaped Kenya’s culture of government.

When KODI was launched, Kenya was only the 22nd country with an open government portal. Today, 30 countries have live, open government sites, though dozens of other countries are in some stage of developing their own. Kenya’s early adoption is due in large part to the efforts of open data advocates both within Kenya’s government and among its influential technology community.

Whether Kenya’s open government will have a lasting, positive impact depends on how Kenyans use the information over time. But KODI’s successful launch illustrates what’s possible when government and technology converge to serve the needs of society.

Many stakeholders, one vision 

Last month, the World Bank released a detailed report about KODI that serves as a case study for open government advocates and practitioners everywhere. Among the takeaways, one can learn how a diverse group of stakeholders from the public, civic and private sectors coalesced to do something tough but important, despite their differences.

Gathering, structuring and publishing large data sets presented KODI’s developers with complex technical challenges. The portal makes available hundreds of data sets from the country’s 2009 census, and from health, education, infrastructure, water and sanitation services. The World Bank provided its development data.

Dr. Bitange Ndemo, Kenya’s Permanent Secretary of Information and Communications was the project driver with vigorous support from Paul Kukubo of Kenya’s ICT Board, and various government agencies.

To garner impetus and support, Ndemo forged a series of critical partnerships with the World Bank and Google, which both provided technical assistance, as well as with a host of local teams.

The platform is powered by Socrata, a Seattle-based company that fashions platforms for local, state and federal governments in the U.S., including open data sites for the city governments of Chicago and Seattle.

Choosing a U.S. firm’s platform rather than to use local developers raised initial concerns. But given the project’s aggressive timetable, the team settled on Socrata, one of only a few companies in the world with the capacity and experience in handling mammoth data sets.

Kenya’s celebrated technology community was instrumental in moving the project forward. Nairobi’s iHub, an “open space” community for developers, played a critical role, as did Ushahidi, the country’s homegrown crisis-mapping agency. (iHub developers built a mobile app enabling a user to locate Constituency Development fund projects and add images of them. The Ushahidi team mashed up census data with health services data on their Huduma site.)

Giant Leap forward

KODI’s launch marks a new chapter in Kenya’s government. Only four years after the country was rocked by post-election violence leaving 1,000 people killed and over a half a million displaced, Kenya fulfilled its mandate of providing citizens with unprecedented transparency and accountability.

Kenya’s President, Mwai Kibuki observed, “Data is the foundation of improving accountability and governance.” Dr. Ndemo tweeted, ”Data will fuel employment and wealth creation like never before.”

In his comments about the initiative, the The World Bank’s Tariq Khokhar, an open data evangelist, said, “Open data in Kenya is special: it comes at a time of national change; it’s got a head start on tools and expertise from the global open data community and it’s happening in a country where the information ecosystem is still maturing.”

The World Bank’s Country Director, Johannes Zutt remarked, “This portal is one of the first and largest government portals with reusable data in sub-Saharan Africa, making Kenya one of the world’s leading exemplars of open data.”

Alex Howard (@digiphile) of O’Reilly Media said, “Open Kenya isn’t simply about meeting data standards or publishing data online. Ultimately, it’s about changing the compact between citizens and their government.”

KODI’s development model can serve as a roadmap for other countries committed to realizing open government. Its successful launch is further proof that open government is an idea whose time has come.

At a time when politics is dictating social agendas in many countries, Kenya’s open government initiative is a testament to what a society can do when it focuses on what really matters.

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More on this subject?

Have a look at Alex Howard’s thorough piece, “GOV 2.0 2011 – Year in Review” and his earlier article, “Open Government Data to fuel Kenya’s App Economy”.  Here’s a post about KODI on the Ushahidi blog.

The OpenGovPartnership noted (1/31): “Now that Kenya has launched its open data portal, the OGP taskforce is becoming less focused on the programmers and more focused on civil society leadership. This week, Kenya’s open data initiative organized a workshop (with the World Bank and the African Media Initiative) for media leaders and journalists…”

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In reflecting on the year ending, my thoughts turn again to Africa, home of six of the world’s top 10 fastest growing economies. Africa’s mobile revolution is spawning exciting, new opportunities for entrepreneurs and engineers. For practitioners eager to experience the impact of their work, there’s no more dynamic and interesting place to be than Africa today.

With that in mind, I’d like to share three short but inspiring talks given in 2011 by three of Africa’s best and brightest pioneers. These trailblazers all began their careers in technology, but now they’re developing “platforms” in the broader sense, enabling a new generation of Africans to reshape their future.

Each speaker offers their unique perspective, but a common theme from all of the talks is that Africa is rising rapidly. Through their courage and determination, Africa’s trailblazers can inspire us all to persevere, whether we work on the continent or not.

Brief bios and video clips:

Patrick Awuah lived in the United States for two decades where he worked at Microsoft before returning to his native Ghana in 2002 to establish Ashesi University.

Ashesi’s mission is “to educate African leaders of exceptional integrity and professional ability”. ’Ashesi’ means “beginnings” in Akan, a language of the region.

With a focus on liberal arts, Ashesi offers courses in computer sceince, management information systems, and business administration.  Since its inception, the university has grown in size and stature. In 2011, Ashesi inaugurated its new campus in Berekuso near Ghana’s capital, Accra.

> His moving talk, The Spirit of the Time, was delivered at Zeitgeist Americas. “Education is about developing character,” he says of Ashesi’s approach to building the next generation of Africa’s leaders.

…

Erik Hersman lives in Kenya where he writes two influential technology blogs, White African and Afrigadget. He’s a Senior TED Fellow, a PopTech Fellow and an organizer of Maker Faire Africa.

During Kenya’s post-election crisis of 2007 – 2008, he helped to create Ushahidi, an open-source platform that tracked eyewitnesses reports of violence occurring in the country. Today, Ushahidi operates as a non-profit company which develops software for information collection, visualization and interactive mapping.

In 2010, Hersman co-founded iHub, an innovative “open space” for Nairobi’s technologists, tech firms and investors with over 6,000 members. In 2011 he co-founded m:lab, a regional mobile incubation lab.

> In his TechPop 2011 talk, Africa on the Rise, he asks, “If you’re an entrepreneur, why would you want to be anywhere else?” He added, “The sun isn’t rising on Africa, it’s risen on Africa.”

…

Juliana Rotich is another co-founder of Ushahidi where she serves as the organization’s executive director. She is the author of the Afromusing blog, a Senior TED Fellow, and a contributor to and editor of Global Voices Online.

She co-founded Mobisoko, a mobile marketplace for language and location-relevant apps in Africa. She was also an analyst with Hewitt Associates in Chicago.

> In her Wired 2011 talk, Rotich tells the story of Ushihidi’s launch and describes how the company’s crowdsourcing platform has been used to track crisis information around the world. ”We started in one country in Africa,” she says, “and now the platform is used in 132 countries.”

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Image courtesy of Dave Ley.

Related resources:

This NYT piece (1/11), “Transforming Africa through Higher Education” discusses Mr. Awuah’s vision and challenges in maintaining Ashesi University.

Here’s a clip featuring Ms. Rotich addressing the UN about Huduma, a Ushahidi pilot initiative launched in 2011 in which citizen reports about government services are collected and mashed up with census and healthcare institution data. More info on Huduma is found in this Guardian article.

Here are two previous posts (2010) on Ushahidi: Out of Africa, Help for Haiti and Kenya’s Tech Helps Chile, too.  And, Ingenuity Born of Necessity in Kenya (2011) featuring Mr. Hersman.

Add: Mr. Erik Hersman’s post (1/4/12), What’s on Tap for 2012?

More info on this subject?

Check out Vijay Mahajan’s ’09 book, Africa Rising.

For up-to-date info on Africa’s high-growth economies, visit the blog by the World Bank’s chief economist on Africa, and the superb, resource-rich Centre for African Economics.

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Yet markets are demonstrating surprising capacities for resilience. Engineers and entrepreneurs in places like Nairobi, São Paulo and Doha are beginning to build export-worthy technologies.

This is a momentous time for anyone engaged in cross-market projects. It’s only fitting that the year’s top books match the scale of the changes we’re witnessing.

Here’s a year-end roundup of books that define our times and guide practitioners with a global perspective:

Thinking Fast and Slow, by Daniel Kahneman – The most influential social scientist of our time describes the two “systems” that shape our thinking and decision-making: ‘System 1′ is fast, intuitive, and emotional, while ‘System 2′ is slower, more deliberative, and logical. This seminal work reveals insights that have overturned traditional assumptions about metacognition.

“The Next Convergence: The Future of Economic Growth in a Multi-Speed World, by Michael Spence – The Nobel Laureate presents an elegant thesis to account for the current surge among emerging economies and its global impact.

Inside Egypt: The Land of the Pharaohs on the Brink of a Revolution, by John R. Bradley – A rich, beautifully written account of the socio-political dynamics in Egypt by a perceptive and appreciative observer.

Egypt after Mubarak: Liberalism, Islam, and Democracy in the Arab World, by Bruce Rutherford – A timely and incisive look at the complex political, economic and cultural forces shaping Egypt today.

The Party: The Secret World of China’s Communist Rulers, by Richard McGregor – An illuminating, inside look at past, present and future leaders of China’s impenetrable Politburo.

The Origins of Political Order, by Francis Fukuyama – This much-anticipated book by one of our most insightful and, at times, controversial political theorists was worth the wait. In the first of three projected volumes, Fukuyama describes the ways by which ideas have shaped political order.

The Price of Civilization, by Jeffrey Sachs – The outspoken Columbia University economist believes that the decline of American civic virtue is at hand. His poses what seems like an obvious question: Why has taxation become demonized? According to Sachs, taxes are the price we pay for civilization.

The Future of Power, by Joseph S. Nye – What are the forces and mechanisms shaping global power and how is society being affected by it?  Nye explores these questions and asserts that the U.S. and China have much to gain by deepening their cooperation.

Adapt: Why Success Always Starts with Failure, by Tim Harford (reviewed here) – The clever British economist demonstrates how effective trial-and-error leads to better results. In our world of complexity and unpredictability, learning from failure is imperative.

Civilization: The West and the Rest, by Niall Ferguson – The economist-provocateur explores a central question: “Why, beginning around 1500, did a few small polities on the western end of the Eurasian landmass come to dominate the rest of the world?” He posits that the West had six “killer apps”.

Monsoon*, by Robert Kaplan – A mind-bending journey across regions of the Indian Ocean which are growing in geostrategic importance as American power shifts gears. Ahmed Rashid aptly describes Kaplan as “a landscape artist who covers the world with extraordinary perception and insight”.

Emerging Africa–How 17 Countries are Leading the Way*, by Steven Radelet. The author, an economist, identifies the reasons for superior economic performance in some African countries. He concludes that the chief driver of economic development is an “interplay between economic reform and political change”.

The Dragon’s Gift – The Real Story of China in Africa*, by Deborah Brautigam – Brautigam debunks the standard myths about China’s aspirations and roles in Africa. It’s an indispensable read for anyone doing business on the continent.

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Endnotes:

* Denotes books published in 2010. (All others were published in 2011.)

Addendum:

Daniel Kahneman fans will likely appreciate his conversation with David Brooks at CUNY: video clip.

Another Kahneman resource is Michael Lewis’ Vanity Fair piece, “The King of Human Error”. Lewis writes:  “[Thinking, Fast and Slow] is wonderful, of course. To anyone with the slightest interest in the workings of his own mind, [the book]  is so rich and fascinating that any summary would seem absurd.”

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The West and the Rest

This is a tale of two economies with interlocking features. One has excess supply; the other has gnawing demand. In the West, economic growth is slowed while emerging markets are busting at the seams. An explosion in the number of urban, middle class consumers and related factors is powering growth in emerging markets.

The World Bank estimates that, on average, emerging nations will grow by 4.7 percent – double that of developed countries — through 2025. That growth isn’t only evident in the so-called BRIC nations, but in Turkey, Indonesia, South Korea, and across the developing world. Some of the fast growing regions are in Sub-Saharan Africa.

In fact, growth in emerging markets would be even greater if it weren’t constrained by a lack of capital, infrastructure and technological capacity. Western companies have the resources and expertise to help bridge many of these gaps.

This is a propitious time for Western firms with a global agenda to enter emerging markets. They can tap these markets by creating new business models, innovative services, and value-added plays by leveraging their IT capability. Here are points that Western businesses ought to consider if emerging markets are on their agenda.

Ready or Not? 

It’s interesting to work with Western companies that see opportunities in foreign markets but haven’t yet devised a market entry strategy. My advice for clients considering emerging markets is to focus on the fundamentals of value-creation. My playbook calls for first conducting a market readiness study to measure the potential demand for the product or service and, on that basis, to help plot a sound market entry strategy.

Understanding customers is central to serving any new market. Customers in emerging markets — both B2C and B2B — often have different buying drivers, like less disposable income, than those in developed markets.  It’s smart to visit the region, meet directly with prospective customers, and ask plenty of questions.  It’s important to gain a rich understanding of the market — its economics, demographics and business climate.

Then comes another round of questions — this one for key stakeholders — including: How will demand be generated (by segment)? Who are the competitors and how will they respond? What are the market barriers — regulatory hurdles, corruption, and supply chain gaps? In short, what are the known risks and how can they be overcome?

Soft Landing

For organizations that have completed the discovery exercises, tested assumptions, and are convinced of the merits of serving the target market, I suggest that they explore several market entry scenarios to choose a strategy that fits their situation.

Some companies benefit from acquiring businesses in the target market while others prefer to form alliances with firms that can help them establish a beachhead. Either approach comes with advantages and disadvantages.

Alliance-building is an undervalued competency that can be nurtured. A skilled alliance officer can identify prospective partners, negotiate partnership deals and help keep alliances on track as the business evolves.

The ‘Ecosystem’

After establishing its beachhead, the market entrant should build a network of diverse, local suppliers. This local ‘ecosystem’ can be leveraged to support many of the company’s critical market penetration activities.

On a related note, I think it’s smart to use local talent and develop local skills wherever possible. That’s an effective way to demonstrate a longer-term commitment to the community. The high caliber of talent that I’ve encountered in emerging markets has been inspiring.

Western companies with a global agenda ought to evaluate whether serving emerging markets makes sense for their business. If so, there are benefits to seizing the opportunity before the inevitable onslaught of competitors joins the fray.

 ***

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As always, I’d appreciate your feedback.

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TALE OF TWO ECONOMIES – ENDNOTES.

Thanks, Alexandre Giesbrecht, for the image.

The section title ‘The West and the Rest’ refers to Fareed Zakaria’s “rise of the rest” thesis in The Post-American World (’08) (updated in ’11).

Despite it’s popularity, I don’t care for the term ‘BRIC’ because it includes oil-based Russia with the more diversified economies of Brazil, India and China.

Seven of the 10 fastest-growing nations over the next five years are in the Sub-Sahara, as charted in this Economist piece (1/11).

More on this subject:

In their 2010 book, Winning in Emerging Markets, Tarun Khanna and Krishna Palepu offer their framework for evaluating and entering emerging markets.

The International Finance Corporation (IFC) provides their annual Doing Business reports ranking countries by regulatory barriers. Year-to-year changes suggest regulatory reform trends. This is Doing Business 2012. 

The World Bank’s report, Global Development Horizons 2011—Multipolarity: The New Global Economy shows that emerging markets will drive global economic growth through 2025.

Related: Strategy +Business piece, Competing for the Global Middle Class (8/11)

Addenda:

The World Economic Forum’s Competitiveness Index (2011-2012)

HBR piece, New Business Models in Emerging Markets (1-2/11), i.e. targeting the middle market opportunities

McKinsey Global Institute (MGI) publications on the subject of economic integration

KPMG’s High Growth Magazine

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His Legacy

In countless tributes to Steve Jobs, Apple devotees are understandably praising him for redefining several consumer electronics categories — the computer, the mouse, the MP3 player, the smartphone and the tablet.

Apple’s sleek devices resonate with users through all the noise and clutter of their lives, whether they’re in Johannesburg, Shanghai or São Paulo.

But Jobs’ impact extends beyond Apple’s wildly successful product line. Jobs not only raised the bar on consumer electronics, he transformed the discipline of design. Due to the universal appeal of his work, he revolutionized the way designers everywhere approach their work.

The gift of flow

Jobs’ most singular gift was his knack for untangling the complex engineering layer in technology to provide a seamless user experience. His devices give their users “flow” — the ineffable state of being fully absorbed as described by psychologist Mihaly Csíkszentmihályi (Flow: The Psychology of Optimal Experience, 1990).

By blending artfulness with precision engineering, Jobs brought us experiences that engage both the left and right brains while appealing to the mind and the senses. In the process, he altered what we want and expect from technology.

Experience designer

Jobs’ impact on design is monumental. As a result of their experiences with his work, a critical mass of designers across every conceivable category has shifted the locus of their attention from the components inside the device to the quality of the user experience. This decidedly human-centic approach, known as Experience Design, is being applied to a growing number of products and services.

Steve Jobs’ genius, determination and uncompromising standards inspired an influential design movement. His paradigm will undoubtedly dominate the field of design for the foreseeable future.

***

Images: Courtesy of Apple Inc.

Here is a Design Week – UK  on Jobs’ impact on design, and Yves Béhar’s piece “Steve Jobs Changed My Life”.

Addendum:  An audio interview (NPR, 10/7) with John Maeda, President – Rhode Island School of Design, about Jobs’ influence on design.

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The misdeeds of Africa’s despots get plenty of media attention because they fit a Western “plug-n-play” narrative about the region. Conversely, the work of Africa’s exemplary leaders is often overlooked.

I’d offer the story of an extraordinary African leader determined to improve the quality of life in her nation. She’s Dr. Ngozi Okonjo-Iweala, who was recently appointed Nigeria’s Finance Minister.

In her previous stint in that role, she compiled a stunning record of economic reform. She was the first woman to serve as her country’s Finance Minister and as its Foreign Minister.

Okonjo-Iweala is an inveterate disruptor of the status quo who is guided by her vision for what’s possible and a zeal for instigating change.

Stories like hers give rise to an emergent narrative that’s being written by Africans. As she puts it, “This is the Africa of opportunity. This is the Africa where people want to take charge of their own futures and their own destinies.”

The Journey

Dr. Okonjo-Iweala has championed economic reform in her native Nigeria and on a global stage. Before accepting the job of Finance Minister for the second time, she served as the World Bank’s Managing Director. Her remarkable record of achievement is due to a formidable blend of intellect, creativity and steely tenacity.

Okonjo-Iweala tells the story of growing up in the Delta State near the Niger River during the Nigeria-Biafra war in the late 60′s. Her father fought on the Biafra side during the conflict as the family struggled to survive. At age fifteen, while her mother was ill, her three-year old sister became stricken with malaria.

She placed her sister on her back and walked 10 kilometers to a clinic. When they arrived, hundreds of people were queued at the entrance. Instead of waiting, Okonjo-Iweala made her way to the side of the building and climbed in through a window. “I knew if she didn’t get help she’d die.”

A doctor gave the baby a shot of chloroquine and re-hydrated her. Within hours, her sister had recovered. “The ten kilometers home with her on my back — that was the shortest walk of my life.”

Okonjo-Iweala’s journey had only begun. She went on to earn an undergraduate degree at Harvard and a Ph.D. in regional economics and development at MIT.

‘Trouble Woman’

Okonjo-Iweala was the mother of four children when she began her first stint as Finance Minister in 2003. Soon, she became known for rooting out corruption and making government more transparent.

She led a series of reforms including decoupling the country’s budget from the price of oil, Nigeria’s chief export, to end its perennial liquidity crisis. She led investigations into government corruption and sacked crooked officials.

In addition, she streamlined the country’s bloated public sector and led efforts to crack down on its notorious Internet and letter extortion scams. Oil companies were required to publish how much they paid the government.

As a result of her stringent measures, public trust in government skyrocketed and Nigeria became more attractive to foreign investment. While a majority of Nigerians embraced Okonjo-Iweala, she made enemies among the country’s anti-reformists.

“They called me Okonjo-Wahala [a play on her surname] — or Trouble Woman. It means ‘I give you hell’. But I don’t care what names they call me. I’m a fighter; I’m very focused on what I’m doing, and relentless in what I want to achieve. If you get in my way, you get kicked.”

Her tenacity served her well. In 2005, she spearheaded her government’s negotiations with the Paris Club of Creditors to pay down $30 billion USD of the country’s debt including the cancellation of $18 billion USD.

Before resigning her post in 2006, Okonjo-Iweala stabilized Nigeria’s currency and cut its inflation rate from 28 percent to about 11 percent. The country’s GDP grew to over 6 percent from 2.3 percent in the prior decade. She strengthened the country’s banks and recovered millions of dollars in stolen assets.

The Mandate

After leaving office, Okonjo-Iweala continued fighting for developing countries at the World Bank raising a record $49.3 billion USD through the Institutional Development Fund. She also had oversight of the Bank’s special food crisis fund helping countries impacted by high and volatile food prices. More than 40 million people in 44 countries around the world benefit from the fund.

Okonjo-Iweala reached her latest milestone on August 17, 2011 when Nigeria’s new president, Goodluck Jonathan, swore her in for her second term as Finance Minister.

This time she has a mandate for extirpating corruption. As a condition to accepting the job, she was granted expanded control over all aspects of the economy including oversight of its ministers.

Okonjo-Iweala’s job won’t be easy. Her mandate comes with lofty expectations. Nigeria’s growth rate remains high but much of its population of 140 million still lives on under $2 a day. Institutional corruption is pervasive.

“The expectation, not just for Nigerians but for the whole world, is quite high,” President Jonathan observed at her swearing in, according to AllAfrica.com.

“People expect so much from you. Some feel that you have the magic wand to change everything. I believe with your level of experience and the support we will give you and the cooperation of your colleagues, all of you collectively, will help to change our own country.”

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Headshot images: Courtesy of the World Bank/IMF Archives

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Want more info on this subject?

Here’s Dr. Okonjo-Iweala’s engaging ’07 TED Talk and a video clip in which she talks about facing Nigeria’s generals after recommending sizable defense spending cuts to fund education.

One of Dr. Okonjo-Iweala’s focus issues, not mentioned in the post, is South-South cooperation, i.e. fostering trade among developing nations.

“I Keep My Ego in My Handbag”, Guardian piece on  Dr. Okonjo-Iweala’s career, work ethic and family life. 

“Is Okonko-Iweala the DeFacto Prime Minister? AllAfrica.com op-ed (9/4/11).

Related but interesting:

Her son, Uzodinma Iweala, is the author of a critically acclaimed novel, Beasts of No Nation (2005). (Here is an audio reading by the author.)

Background:

Recommended for readers interested in Nigerian history – Peter Cunliffe-Jones’ crisp account, My Nigeria – Five Decades of Independence (2010).

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1. Song of Africa “It’s not a picture of a dark continent but...

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Most everyone interested in Africa’s connectivity revolution has seen the handiwork of Steve Song, a South African social entrepreneur who wants to make telecommunications accessible to more Africans. His iconic map of Africa’s undersea fiber optic cables is a visual narrative of the continent coming “on-line”.

When Song began the mapping exercise three years ago, his intent was to document the continent’s two or three existing cables in order to aid his work. Since then, the number of new undersea cables encircling Africa has burgeoned, and Song has faithfully revised his map.

While engineers and mobile operators rely on the map for technical purposes, Song has found that a wider audience has been using the map for a variety of reasons.

“My theory, for which I have no other evidence than the nature of the feedback I have received from users, is that the map paints a different-from-the-usual picture of Africa,” he observes.

“It’s not a picture of a dark continent but rather a brightly lit one, lit by terabits of light capacity brought by a dozen cables landing on sub-Saharan African shores either now or in the near future. Africa, the brilliant continent.  This also happens to be the Africa I believe in.”

The time-series version of Song’s map represents Africa’s digital divide being bridged as investment capital pours into the region.  Each iteration depicts incremental gains in Africa’s Internet access and associated reductions in the cost of access.

Terrestrial Edition

But Song’s undersea fiber map only chronicles bandwidth being supplied to Africa’s rim. Vast swathes of the continent’s interior have yet to be reached by terrestrial fiber, leaving gaps in coverage for millions of Africans. There are no maps that chart the Sub-Sahara’s complex terrestrial infrastructure.

Therefore Song decided to start mapping terrestrial cables, too. But that task will be daunting given that there are many more terrestrial lines than undersea cables. The good news is that Google Africa recently offered to lend a hand. The company is providing Song with much-needed funding and global information system (GIS) support.

Song dubbed the project ‘AFTerFibre‘ (Africa’s Terrestrial Fibres) which he hopes to complete by next year.  In the meantime, he’s set up a Google Group to encourage others to help fill in the missing pieces.

The implications of Google’s involvement are significant. The company recognizes the need for accelerating connectivity across borders, and they see mapping as a critical step in the process.

As the marketplace gets a more complete picture of Africa’s digital infrastructure, new opportunities for commercialization will result in Internet accessibility for more Africans while driving economic development across the continent.

Song says, “I hope that a map like this will inspire the same sort of local/regional projects in the way that undersea cables have inspired national fibre projects.”

***

Map courtesy of Steve Song. His aptly-named blog, Many Possibilities, is a Touch Points ‘recommended resource’.

Additional info on this subject is found on the Tech4change blog. Here are facts and figures on bandwidth and fiber penetration in Africa.

Addendum (Aug 20-11): Afrinnovator’s Internet/Broadband (Fiber) ‘Pulse Check’ (Aug 6).  And, here’s Matt Berg at PopTech 2010 who sums it up best:  ”We have fiber.  We’re no longer sipping through a straw.”

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1. Ingenuity Born of Necessity in Kenya Hersman's pitch is compelling: Nairobi's most promising developers are creating...

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Nairobi Skyline

“This is the future of African technology, and if you blink, you’ll miss it.”  ~Erik Hersman

On the ‘Silicon Savanna’

Last month in Nairobi, Kenya, a conference called Pivot25 connected 25 promising mobile app developers from East Africa with investors and venture capitalists. Events like this one, based on the Y Combinator model, give aspiring developers a rare chance to pitch their ideas for possible seed capital.

What’s intriguing about Pivot25 is the attention that it drew from outside the region. TIME Magazine ran a piece about the conference from the standpoint of Nairobi’s contribution to global technology. CNN’s Global Public Square covered the event, too. Why so much attention?

It’s due to Nairobi’s growing reputation as a hotbed of mobile software development. The city has earned the moniker ‘Silicon Savanna’ due to high-profile, innovative mobile ventures launched there including Ushahidi, the ‘open source’ crisis-mapping platform, and M-Pesa, the world’s first mobile money service — a model for ‘access to banking’ services.

Both platforms were originally modest, homegrown solutions for local problems that were later widely adopted outside the region. The global tech community is expecting stellar performers in Nairobi’s next wave of apps and services, too.

The right stuff

On the surface, Nairobi may not look like a prime contender to be the next ICT hub. With a population of 3.5 million, it’s only the 12th largest city on the continent, but it’s one of East Africa’s most vital commercial and cultural centers.

Incubators are springing up in Lagos, Accra, Dakar and other large African cities, but Nairobi stands out due to the top-tier multinational firms using the city as a base for serving Africa’s booming mobile markets.

Nairobi is becoming known for its vibrant community of mobile developers whose ingenuity and confidence are growing over time. Their cleverly designed apps — elegant in their simplicity — are now part of Africa’s social landscape.

The city is also home to a small, vocal cadre of tech advocates who’ve trumpeted their community’s early wins, convincing audiences around the world that there’s more innovation on the way. The impact of potent advocacy is often overlooked when observers speculate about why Nairobi has the right stuff to be the epicenter of mobile technology.

An ‘ecosystem built on talent’

One of Nairobi’s more influential advocates is Erik Hersman, co-founder of Ushahidi, and founder of iHub (‘innovation-Hub’), an open-space tech incubator with over three thousand members. He contends that Nairobi’s pool of gifted developers is responsible for the region’s dominance.

“It’s an ecosystem built on talent,” he said in an interview with TNW Africa. “Nairobi is exploding with world-caliber techies, and companies such as Google, Cisco, Nokia, Seimens and Airtel (all of which built their African headquarters in Nairobi) have recognized that.”

He added, “Certain cities tend to be hubs, success breeds success, so when someone wins in a place like Nairobi, it quickly attracts more entrepreneurs and spinouts.”

A global stage

Success does indeed breed success, but the region also benefits from Hersman’s unique ability to attract capital for funding new projects. He’s not only a champion for Nairobi’s talent, he also creates workspaces for nurturing it.

In addition to his iHub initiative, described as “part open community workspace, part vector for investors and VCs, and part incubator,” Hersman is a driving force behind m:labs — Africa’s first mobile incubator launched on the heels of Pivot25 with support from the World Bank, Nokia and the Government of Finland.

Through his influential ‘White African’ blog and his roles as a TED Fellow and a PopTech Fellow, Hersman has a global stage on which to showcase his community’s engineers who bring, as he says, “ingenuity born of necessity”.

His latest contribution to building Nairobi’s image as an tech hub was his involvement in the Kenya Open Data Initiative (KODI), launched July 8, when Kenya became the first African country, and one of the first in the world, to make government data accessible to its citizens. (Here’s more on KODI.)

Hersman’s pitch to investors is compelling: Nairobi’s talented developers are creating the next wave of mobile software for the African market and beyond. Like their predecessors, the most promising new apps will affect a large number of people in a meaningful way.

This is an exciting space to watch. We’re witnessing history unfold now in Africa. As TIME Magazine’s Africa bureau chief put it: “…this is not a story merely of how technology is changing Africa. Africans are changing technology right back.”

***

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Image: ‘Nairobi from Uhuru Park’ Courtesy of Arthur Buliva

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Want more info on this subject?

• –Superb WIRED piece, Switching On: Africa’s Vast New Tech Opportunity (7/11).
• –Other champions of Kenya’s mobile tech community include Ory Okolloh of Google Africa and Juliana Rotich of Ushahidi
• –Hersman makes the case (2 clips): Africa in the 21st Century, and in his ‘09 TED Talk on launching Ushahidi
• –For context, Ken Banks, founder of kiwanja.net and FrontlineSMS, shares his views on mobile usage in developing markets
• –WIRED piece (July 12, 2011): Switching on: Africa’s new tech opportunity
• –TED Global – Africa (’07) series from Arusha, Tanzania — it’s amazing how far the African tech scene has evolved since then
• –A Touch Points post on Ushahidi’s role in the aftermath of the Haiti earthquake

• –Addendum: Hershman post (7/18), “What makes iHub work?”

As always, I’d appreciate your views…

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Here are my Summer Reading picks for those who go for both engaging narrative and penetrating insight. I’m recommending two distinctly different books by writers who don’t want to merely inform their readers; they want to shape the conversation. Both authors accomplished what they set out to do.

Tim Harford | Adapt – Why Success Always Starts with Failure

“Today’s challenges simply cannot be tackled with ready-made solutions and expert opinions; the world has become far too unpredictable and profoundly complex. Instead, we must adapt—improvise rather than plan, work from the bottom up rather than the top down, and take baby steps rather than great leaps forward.” ~Tim Harford

In his new book, Adapt – Why Success Always Starts with Failure, British economist Tim Harford of the Financial Times (The “Undercover Economist”) tackles a subject that’s close to my heart, the necessity of experimenting, failing and responding constructively to failure.

It’s become fashionable in recent years for American business writers to trumpet the virtues of failure. This is a radical departure from our culture’s traditional mythology where heroes walked with a swagger of infallibility. Today, we’re acknowledging that both trial and error play a key role in problem solving. Our new mantra is the old Japanese proverb: fall down seven times, stand up eight.

In Adapt, Harford argues that failure has always been useful in various ways, but in this age of complex challenges and pervasive fragility it’s vitally important. In our interconnected world where failure occurs frequently and its impact is more threatening, it’s imperative to recognize and adapt to errors.

“We face a difficult challenge,” he says. “The more complex and elusive our problems are, the more effective trial and error becomes, relative to the alternatives. Yet it is an approach that runs counter to our instincts.”

Harford, a trenchant storyteller, recounts several illustrative cases about how failure led to success. He tells how the U.S. military learned from its early tactical mistakes in Iraq to mount a more adaptive, successful counterinsurgency campaign.

In this instance, the takeaway for practitioners, both in and outside the military, is to do a better job transferring the “local knowledge” acquired in the field (or shop floor) to the command levels at their organizations.

Harford contends that there are three critical steps to failing and adapting successfully: Try new things knowing that some will invariably fail, make failures “survivable,” and be sure you know when you’ve failed. These steps apply to solving a wide range of problems.

Like Steven Johnson (Where Good Ideas Come From) who advances an elegant argument for innovating through experimentation, Harford builds a compelling case for intelligent tinkering. The trick isn’t to avoid mistakes at all cost but to learn and apply their lessons.

That our society is becoming comfortable with failure is a sign of maturity. It’s hard to fathom that until recently, admitting failure was rare, and encouraging it was anathema.

Sherry Turkle | Alone Together

In Alone Together — Why We Expect More from Technology And Less From Each Other, Sherry Turkle takes a critical look at how we interact with technology. Turkle is an author, clinical psychologist and an MIT scholar who leads MIT’s Initiative on Technology and Self.

After interviewing hundreds of adults and children, Turkle concludes that technology encourages people’s tendency to form superficial, less demanding on-line relationships in lieu of complicated, real bonds that are riskier and which require a greater investment of time and emotional energy. The implications, she concludes, merit our attention.

“Once we remove ourselves  from the flow of physical, messy, untidy life — and both robotics and networked life do that — we become less willing to get out there and take a chance,” she observes.

Teenagers are texting obsessively and many of us are shifting attention toward social networking and away from more substantial relationships. The consequences are troublesome for Turkle. She laments, “Networked, we are together, but so lessened are our expectations of each other that we can feel utterly alone.”

Turkle’s concerns echo those of Nicholas Carr, author of The Shallows, who contends that the Internet fosters a culture of surfing the Net rather than deep reading, and superficial thinking rather than focus and reflection. Like Carr, she asks us to consider the effects of how we use technology so that we can make choices that better serve our interests.

Despite the trends that she notices, Turkle is unaffected by the prospects. She’s not afraid that we’ll disengage entirely from real world relationships in a dystopian future, but she does think we ought to pay attention to how technology is mediating social ties.

Turkle encourages looking at behavior with a longer lens and drawing our own conclusions. The images are sometimes disquieting but her analysis is measured: “We’ve gone through tremendously rapid change, and some of these things just need a little sorting out.”

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Want more info on this subject?

Sherry Turkle on The Colbert Report; and an audio clip of Tim Harford interviewed by economist Russ Roberts of George Mason University.

A recent post (5/4/11) on how the U.S. military learned from failure, excerpt: The planners [of the SEAL mission in Abbottabad, Pakistan] had, in fact, learned from the disastrous rescue attempt of U.S. hostages in Tehran in 1980 that was undermined by a helicopter accident. Learning from prior mistakes is essential in effective contingency planning.

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Meta-planning

As information comes to light about the Special Ops mission in Abbottabad, Pakistan, we’re reminded of the value of effective contingency planning. Military analysts will one day reconstruct the planning measures taken by the JSOC team, and we’ll learn how the project specialists succeeded despite the challenges.

For now we can only speculate about the risks and uncertainties facing the planners at key decision points. But we do know that the mission’s tactical planners had to consider two big questions at every juncture: What can go wrong here, and what do we do about it?

These aren’t the only questions the planners had to pursue. They have to question the intelligence they’re using and they have to examine their own assumptions. Guarding against groupthink is a first order consideration. These “meta-planning” aspects of the exercise are as vital as formulating the action plan itself.

Redundancy

That all of the SEAL commandos returned safely after intercepting their target — despite losing a chopper to a mechanical malfunction — shows the value of effective planning.

While the planners may not have envisioned the chopper being disabled quite the way that it was, their contingency measures called for a spare unit. Back-up choppers expanded the team’s capacity to respond to a range of potential threats.

The planners had, in fact, learned from the disastrous rescue attempt of U.S. hostages in Tehran in 1980 that was undermined by a helicopter accident. Learning from prior mistakes is essential in effective contingency planning.

Radar Love

Seasoned tacticians talk about keeping their “radar on” when planning risky operations. By that, they don’t mean being passively alert. They mean changing “frequencies” regularly to see what else might appear on their screen.  They mean an intuitive “feel” that experienced practitioners develop. Evidently, the planners of this mission kept their radar on.

This operation was surgical because of several factors: sound intelligence, planning and execution.When the details of this mission are finally unpacked, we’ll be able to take a closer look at what happened. For those of us interested in how practitioners can improve their planning of complicated, high-risk initiatives, this operation should make a splendid case study.

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Want more info for this subject?

• Former U.S. Director of National Intelligence, Dennis Blair, talks about the planning and execution of the mission with Charlie Rose. Here’s a recent post, Planning for Uncertainty, about a related tool, Scenario Planning.
• The problem of groupthink at the tactical planning level is explored in this paper (PDF) by Maj. Phillip M. Johnson of the School of Advanced Military Studies.

Addenda:

• President Obama discusses the mission, including his active role in the planning process, on 60 Minutes.
• What Happened that Night in Abbottabad, in the New Yorker.

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The Middle East (1997) – Author Bernard Lewis is the senior dean of Middle East scholars. He’s a gifted storyteller with unparalleled subject mastery – a rare combination. Lewis makes clear sense out of complexity. This engaging primer is the gold standard of books on the region.

A Peace to End All Peace – The Fall of the Ottoman Empire and Creation of the Modern Middle East (2001) – David Fromkin toiled for ten years to describe the birth of the region’s nation states. This is the story of how the Western powers carved up the Middle East with little regard for the consequences. It’s required reading for anyone interested in understanding the forces that shape the region today.

The Modern Middle East: A Political History since the First World War (2nd Edition) (2011) – This primer by Mehren Kamrava provides a sound historical context for the events of today’s Arab Spring. Kamrava updated the book in the 2nd edition, published earlier this year.  It’s recommended for anyone wanting to fill the gaps in their understanding of the region.

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Using a longer lens

It’s been twenty years since the publication of Peter Schwartz’s insightful primer about scenario planning, The Art of the Long View. In the book, Schwartz makes a convincing case for using scenario planning in approaching strategic challenges of various kinds.

Schwartz, who led scenario planning efforts at Shell, Motorola, and Pacific Gas and Electric, concluded that the technique could be applied to handling the emergent complex threats that companies were confronting in the 90′s.

Since then, the world has grown radically more complex, more uncertain. Globalization and the Internet have woven together our institutions so that a crisis in one corner of the world can spread virally with far-reaching consequences.

Cascading consequences

We now live in a world where an unknown street vendor in an obscure Tunisian village sets himself on fire and a few weeks later the dictatorial regime in Egypt collapses. Those events triggered spiraling oil prices which boosted worldwide food and commodity prices with a cascade of far-reaching consequences.

While leaders can’t predict the next cataclysmic event, they must now contend with a wider range of plausible, discontinuous threats. Failure to do so can imperil their institutions.

In a world where traditional, linear thinking is inadequate, scenario planning is a platform for enabling problem solvers to explore the question: “Given what we know, and what we don’t know, what should we do now?”

That’s a significant question, but it’s not enough to simply ponder significant questions. Problem-solvers must also overcome the internal barriers – psychological as well as physical – which can paralyze organizations when the stakes are high. Scenario planning provides a context for examining assumptions and biases, and for avoiding the denial that ensues when facing existential threats.

Schwartz observes, “When decision-makers begin to look at the future, denial acts as an automatic shut-off valve: ‘I can’t consider that…’ A good scenario asks people to suspend their disbelief long enough to appreciate its impact.”

The Singapore Miracle

One of the more celebrated scenario planning cases is the Singapore story. That nation’s government first used the technique to help build its nascent entrepreneurial society in the 70’s and 80’s, and later to cope with a string of discontinuous shocks that threatened its economy including the Asian financial crisis of the 90’s.

Since then, Singapore has embedded the technique in its strategic planning efforts. Scenario thinking helped its leaders to recognize that in a region increasingly dominated by its giant neighbor, China, their nation must become an innovative technology hub. (Singapore’s mantra says it best: Anticipate change, stay relevant.) As a result, the government is investing $12 billion USD in technology R & D over five years — a 20% spending increase — to attract gifted engineers and entrepreneurs.

Lessons from the field

My own experience with scenario planning in a variety of settings has been overwhelmingly positive. It remains one of the more advanced tools in the strategic arsenal. My appreciation of the practice has only grown over time.

I’ve learned this: Convene the right problem-solvers under the right circumstances and they’ll reach a shared understanding, despite differences in perspective. Scenario planning helps organizations to recognize threats, opportunities and weak signals, and it often leads to practical solutions that everyone in the room can support.

When The Art of the Long View was published in ’91, scenario planning was deemed a novel technique for organizations facing rare and unusually complex issues. Today, most of our pressing challenges are laced with complexity — that’s our new reality.

If we’re going to prepare for what’s next, let’s bring in our sharpest minds and give them the tools to move the enterprise forward. I’m pleased to report that scenario planning is still the right tool for the job.

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As always, I’d appreciate hearing your views…

Want more info on this subject?

1. One of the more interesting critiques of Schwartz’s book is found in a video dialogue between Niall Ferguson and Schwartz
2. Here’s an insightful talk (video clip), The Singapore Miracle & Gov 2.0, by Peter Ho, Singapore’s former head of civil service, who explains his country’s work with scenario planning. Peter Schwartz is also featured
3. More on scenario planning is at Global Business Network (GBN), co-founded by Schwartz
4. Have a look at the World Economic Forum’s on-going scenario planning initiatives
5. Mats Lindgren’s ’09 book, Scenario Planning–The link between future and strategy
6. Bonus: An hour with Lee Kuan Yew, former PM-Singapore and author of ‘From Third World to First : The Singapore Story: 1965-2000′  on Charlie Rose (3/28/11)
7. Here’s a look at the Decision Support practice at my company, Osprey.

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The uprisings in the Arab world are capturing worldwide attention not only because we’re witnessing history in the making, but because the changes are bound to affect us all. We live in a world that’s interconnected in ways that were hard to fathom only a few years ago. Interconnectedness is creating new challenges with social implications that traditional institutions and leaders aren’t equipped to handle.

The clashes across the Middle East and North Africa are only the latest example of unforeseen events that reverberate across regional boundaries. Before that, the sub-prime mortgage crisis in the U.S. sparked a deep global recession that affected more sectors than anything economists had seen before. As some economies began recovering during the following year, Europe’s mounting debt crisis triggered  a cascade of new problems in distant economies.

Today’s challenges, geopolitical or otherwise, are more difficult to predict, understand and handle than the kinds of problems we’ve seen until recently. As the world grows more interconnected, we become more exposed to what design theorists Horst Rittel and Melvin Webber called “wicked problems” which are substantially harder to define and solve than so-called “tame” problems.

Force Majeure

Wicked problems are a major force in today’s world. Many of us working on a global stage recognize that the kinds of challenges we face now are wicked by nature. Tackling them requires greater creativity and cooperation with our peers. Solving wicked problems is the defining challenge of our age.

Wicked problems are vexing because they have multiple, interrelated causes that can’t be solved by traditional tools and methods.  They are, by definition, unique and novel.  Wicked problems occur in a social context where stakeholders tend to disagree about the underlying causes thus hampering efforts to reach an effective solution.

Wicked problems affect nearly every organization and leader today, yet many leaders honed their problem-solving skills when most issues could be readily circumscribed and methodically solved.

Roger Martin observes, “There was a time when leaders shared a sense that the problems they faced could be managed through the application of well-known rules and linear logic.  Those days are gone.  Most of today’s important problems have a significant wicked component, making progress impossible if we persist in applying inappropriate methods and tools to them.”

Lean-software developer Mary Poppendieck puts it another way:  “The easy problems have been solved.  Designing systems is difficult because there is no consensus on what the problems are, let alone how to solve them.”

Wicked problems demand new ways of collaborating. Wicked problem-solvers must first seek to gain a common understanding with their counterparts. The new skills required include self-reflection, consensus-building and mobilizing others. My hunch is that relational competencies will be more critical measures of future leaders.

“Wicked problems call for us to harness all the creativity and knowledge at our disposal,” says Martin.  “Whether we choose to fight one another or work together to confront threats and opportunities, our fate and common wealth are in our hands.”

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Want more?

Check out the University of Toronto Rotman School’s Rotman Magazine, WINTER 2009, “Wicked Problems” including a feature by John Camillus (“Strategy as a Wicked Problem”) and an interview with Jeff Conklin of CogNexus.  Conklin identifies six characteristics of wicked problems:

1. The problem is not understood until after the formulation of a solution
2. Wicked problems have no “stopping rule”
3. Solutions to wicked problems are not right or wrong
4. Every wicked problem is essentially novel and unique
5. Every solution to a wicked problem is a “one shot operation”
6. Wicked problems have no given alternative solutions

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