Final Reflections!

The beauty of this course TWC is that it gives insight in to technology and innovation and its significance in broad range of areas. It shows how an individual is not a subscriber of technology only if he/she carries smart phone, ipod, or have access to computers and internet. In one of the sessions we discussed the revolution of ICT and in the next session we had a discussion on BioBusiness. I loved how in session on emerging technologies we had the freedom to bring any interesting technology of area we are interested in to class. This sort of freedom and flexibility allowed us to look at technologies that look at possibility of living on water for example and the possibility of tooth regeneration. Not only, have we covered broad range of areas where technology is applied or used but also the impacts both negative and positive of such changes. Again I hope with the interdisciplinary approach I have learnt to evaluate and analyse an innovation from different angles - social, political, legal, environment and economic. I can undoubtedly say that this has been a unique experience.

The course concluded with our group projects that involved us to work in teams and make a website on our area of interest. I and my group chose to make a website on car safety technology. I have always been interested in car’s technology and as a group we realised that few people know about the safety features of the cars that they drive. So we chose this topic. This was the first time I worked on a project which involved making of a website and while working on the website I learnt many things about making website. This also included many challenges. Often I found the website quite complex but I think I am quite satisfied with our product. Here’s the link to our website - http://www.wix.com/2011twc/cars. Feel free to surf the site and leave any comments or queries on contact us page.

The other groups also made websites on many interesting topics ranging from technology that aids the disable to revolution in arts because of technology, social media and ICT. Through the websites not only the groups delivered the relevant content but also added a personal touch and perspective to their websites. I enjoyed looking through each website because there were many areas such as technology and visual arts which I was interested in. I have always had special interest in visual arts but I do not remember thinking about the impact on technology on it. Hence, it was interesting to look at the website on technology and how it influenced arts.

Besides I really enjoyed exploring the website on information and communication technology. I liked how the group extended their scope from development of ICT from past to present to future’s further developments like possibility of transmitting information through light. They also their personal take on future communication technology by looking at possibility of communicating such that emotions of another individual can also be understood.

On the whole I believe it’s been a fun and an enriching course. My personal rating on this course would be 9.9 /10.  :)

Session 10

Week 10 was about technology assessment and forecasting. This session basically sums up the course TWC. Basically, in the past few weeks we looked at how technology has brought changed in our world in different areas such as communication, healthcare, education and even our food/nutrition. Along the way, both positive and negative impacts of technology were explored. The different approaches that individuals or companies may take towards innovation were also highlighted. After looking at the past, present and emerging technologies what holds most importance now is the future. What next? In order to answer this question, we need to carry out technology assessment and forecasting.

The different strategies of forecasting and assessment of technology is essential because that guides us while we make decisions about where to invest our time, money and resources. This can we explained through a quote by Benjamin Franklin.

  

“Look before, or you'll find yourself behind” - Benjamin Franklin

The quote is relevant to us and very true. If we do not think about our future, we will be left behind. We need to imagine and be creative to innovate and make our future. There is a need to stop and evaluate the emerging technologies and then make decisions accordingly.

Technology forecasting is important for everyone, every company and every government. Yet, it was realised that forecasting and technology assessment may not even make to priority list of many governments especially the less developing countries. Technology assessment can be most beneficial for poor countries because by assessing and forecasting the future trend, governments can make budgets more efficiently; however there are always problems like corruption which may still result in misallocation of resources.  I realised this when I was researching for my presentation of Health Technology Assessment (HTA) in Canada. Canada being a rich and developed nation is investing a lot in HTA. In my presentation I focused on the horizon scanning approach in HTA. Horizon scanning is about recognising new emerging technologies and evaluating them, to determine which technology is best eligible for further funding. Unlike making strategies after looking and observing our past, strategies should be made by having futuristic vision. Hence, planning may be more efficient when working backwards from future to present.

Another presentation was done on kids forecasting the future. The presentation reemphasised the need to be creative and imaginative. If we think like children then we can come up with more interesting innovations. The presentation made me curious about what happens to our imagination when we grow older. :D

Previously, I think I was quite very unsure about this area of forecasting and assessment but after the session I think I understand the importance and various ways of conducting technology assessment and forecasting. The session was a good introduction to the topic. My personal rating of this session is 9/10

Session 9

This week was a much awaited one by me and my class mates. This is because it was about Emerging and future technologies. Technology is a world without boundaries and this makes it an area full of excitement. The exponential rate of change in technology has seen many disruptive and evolutionary changes. Gone are the days of buying music CDs and Walkman because iPod and iTunes is in. everything nowadays is more compact and faster than ever. So where are we moving towards?

One of the videos that we saw in class was about clay tronics. The plastic chips an electronics may eventually results in extinction of silicon chips. plastic technology can be very helpful in future because it is less fragile and can result in electronic goods such as phones and television screens that are flexible. A possibility of application of plastic chips and sensors can be on medicines casing, where the packing can let an individual know the time at which them medicine should be taken. The video also mentions the possibility of having plastic sensors in contact lenses so that one can browse internet too easily. I personally think such a technology can be quite freaky. These technologies can raise privacy issues. For instance, the plastic chips and sensors may easily be transplanted or rather fused in to one’s body, so someone else can keep track of where you are. Here’s the link to the video – Plastic electronics! - http://www.youtube.com/watch?v=8_Tv5Ox_U90

Meanwhile, the drivers of change and development of technology were explored. One of the drivers is the unmet demand in the market. There is a gradual move towards technology driven opportunities from market driven opportunities. Furthermore, the technology driven opportunities are resulting in supply of goods that can create demand. Apple exemplifies this point very well. The existence of iPhone and iPad has created demand for such products. Mass media also plays a vital role here. Then there is confluence of 4 ‘Smarts’ – Smart people, Smart money, Smart ideas and Smart alliances and partnerships. More importantly, imagination is the secret ingredient that is required to be able to innovate.

Other technologies that we looked at included augmented reality, artificial intelligence and robots. As we looked at different technologies, several problems that it may result in were recognized. For example if are reliance on robots rise in the knowledge economy, then we may have social problems because employment in previously labor intensive industries would rise. If robots would be designed to do low skilled jobs then what will people with low skills do. Also, problems like income distribution may rise. Though the robots can help do risky tasks such as working in coal mines, they would create unwanted unemployment.   

Another, issue that crops up with technologies such as robots with artificial intelligence and robots that are made to look like humans is where to draw a line to tell difference between a human and a machine. Can machines become smarter than human beings? If humans begin to interact with robots such as Milo of project Natal and AI Robots in this video http://www.youtube.com/watch?v=i2wYWAlg8Do, the definitions of relationships may change. To what extent will we get engaged with such technologies?

Another technology which interested me was the augmented reality. Augmented reality blurs the line between what is real and what computer is generated by enhancing what we see, hear and smell. Augmented reality may be seen in our smart phones, laptops and even the windshield of cars.

Like every session, we had presentations in class. The presentation which I enjoyed the most was about living on water. Presentation explored possibility of living on water and the ongoing projects of floating islands around the equator. It is an interesting because it may help solve our problem of growing population and overcrowding in cities. But there are many obstacles to overcome, which may include the legal issues and other socio-cultural impacts.

My personal rating of this session is 9.5/10

Session 8

Session 8 was about one of my favorite topics – Energy! Today, the world is facing challenges to meet sustainability and energy is one hot topic. How fast can we reduce our reliance on fossil fuels and increase use of renewable energy sources?

The session began with an interesting observation. “If everyone consumed as much energy as the average Singaporean and US president, the world’s oil reserves would be depleted in 9 years.” This observation is firstly very alarming. The amount of consumption of energy is that high that it can result in depletion of the oil reserves in such short amount of time. Secondly, having lived in Singapore for four years now, my personal perception of the city was that it is very clean and green. However, to my surprise it is not at all green. Singapore is a developed nation and is yet reliant on oil and coal for energy.

Energy is a pressing issue as the world consumption is increasing rapidly and our natural resources such as oil and coal are depleting at a rapid rate. In such times, countries such as Brazil are setting examples of sustainable development. Brazil does it by its Proalcool Gasohol Programme. In Brazil, car engines have been refined such that they can run on ethanol/gasohol. Brazil is a very good example because even though it is a developing country, it is taking initiatives towards economic growth and development sustainably.

The need to innovate and that change is the sole constant was reemphasized in this session. Countries and businesses, who would invest in clean energy today, will benefit and be leaders in their fields tomorrow. Germany exemplifies this point very well. I found it inspiring when we saw a video about Germany and the way they are integrating solar energy in their energy systems. It is inspiring because Germany is a cold country. It does not have access to a lot of sunlight. Yet, steps are being taken to promote solar energy. Furthermore, governments often see reluctance to change among people. Perhaps, due to cost related issues. Germany overcame such issues by awareness programs and incentives such as tax credits to common public. Can countries like Singapore follow Germany’s steps? When Singapore does have money to invest in clean energy then why I sit still heavily reliant on oil?

Another interesting observation made in this session was that there has been an inverse relationship between petrol prices and research and development in innovation. The present economic crisis explains this point well. The economic slowdowns not only see changes in consumer behavior but also cut in country’s budgets in areas concerning clean energy such as in USA.

This week we had interesting presentations on topics such as Tar sands and energy from trash. Both the topics were new to me. Tar sands found in Canada involves taking out oil from the sands. It is a unique area because it can possibly solve our problem of depleting oil. However, there are many potential environmental hazards such as pollution. On one hand we have a pool of lot of energy; on the other hand there are many potential negative consequences. Such issues are hard to handle as people and government confront dilemmas between the practical and ethical issues.

The next presentation was about energy from trash. This technology goes beyond recycle, reuse, reduce and also refuse. It is about extracting energy from the waste that we produce.

I enjoyed being part of this session. My personal rating of this session is 10/10 :)  

Session 7

Prof. starts every session with a quote.  This time the quote was by him -

“When we are able to grow the resources we need,

we will finally be on the road to sustainability”- Gurinder Shahi

I think this quote is very true and relevant to our generation.  If we are able to generate the resources that we need, then we can fulfill our both present and future needs.

This week we continued with theme on BioBusiness and changed our focus towards Agrobiology, Environmental life sciences and Industrial biotechnology. We looked at the rising trend of urbanization in cities and countries around the world and thus the rising demand for resources such as food.

In order to meet growing demand of food, we have seen Green revolution in countries such as India and China. By investing in research and development in this area, there are high yield and more nutritious crops. High bred and yield crops can help add value to agricultural goods and I think it can therefore, help move such crops from valley to summit opportunities. Furthermore, research in this area has allowed people to grow food where it was previously harder to grow food. The genetically engineered food such as rice is more nutritious. Also, technology has resulted in crops that are drought and pest resistant.

 But there are many controversies concerning genetically modified (GM) foods. Interestingly there is cultural resistance towards GM foods for example in Europe. Also, there are concerns about environment and sustainability as chemical pesticides are used to grow more food crops.

An area which intrigued me in one of the reading was the Biopharming. Biopharming refers to efforts to grow pharmaceuticals by using genetically modified plants and animals. For example, vaccines in genetically modified maize and potato and human proteins that can be separated from milk of cows and goats to be used for therapeutic purposes.

Furthermore, discussion took place on challenges and possibility of meeting sustainable environment and industrial development in developing countries. There are many obstacles in our way to achieve sustainable development. These include structural and financial hindrances.

At the end of session, we had presentations on GM foods, growth hormones in cows and bio plastic. Each presentation explored the various positive and negative benefits of concerned technologies. Something that interests me is the ethical questions that these technologies raise. For instance, in order to get more meat from cows or chicken, is it right to inject growth hormones in them? Is it ethical to let the animals suffer for the sake of our benefits? Can synthetic or artificial meat can be possible alternatives?

I would rate this session 8/10

Session 6

This week began with another fascinating theme of BioBusiness revolution with focus on healthcare and biomedical sciences. In this session we learnt about what constitutes Bio Businesses. BioBusiness is the commercial activity based on understanding of life sciences and life sciences processes. It makes up about a quarter of world’s GDP and employs some 40% of labour force. However, most of this work force is employed in subsistence level farming. Hence, now BioBusiness is moving towards more sustainability and high value goods and services.

Then we looked at few trends in healthcare industry. It was realised that we are living in a world where millions and millions of people are dying of communicable/nutritional diseases. Such problem is more prevalent in south Asia and Sub-Saharan Africa. The other more developed countries are also not immune to the same problem but there the incidence of chronic diseases is much higher.

Never did I realise that BioBusiness has end number of opportunities. Some areas of opportunities include agriculture and biotechnology, industrial and marine bio technology, pharmaceuticals and diagnostics.

One of the key concepts learnt in this week was concerning the type of opportunities. Any given opportunity may be categorised into Valley, Summit and Cloud opportunity. Valley opportunities involve many competitors and low barriers to entry. Meaning there is an existent market for a particular product/service.  Summit opportunities are more technology and knowledge intensive, there is less competition and innovative ways of businesses can be used to make high profit margins. Cloud opportunities are also technology and knowledge intensive, with few competitors but there are high barriers to entry. Innovation in this area is likely to be technology driven as it applies to adoption and promotion of technologies that are still emerging. Unlike cloud opportunities, Summit opportunities are usually market driven. The innovation in concern is in high demand.

In class discussion, it was realised that a business should invest resource sin summit opportunities and then should move towards cloud opportunities. The possibility of moving from valley to summit opportunity was also discussed. It may be achieved by adding value to the product/service by innovative means. For example, traditional medicines that had lost their popularity some time ago are now seen as summit opportunities.

Furthermore, discussion took place on issues such as innovation systems and intellectual property (IP). For instance, previously, companies would use IP to protect themselves from others and transfer of knowledge was hard. The purpose to innovate and solve issues was somewhat lost because things like patents simply become means of incurring more profits. But new IP involves more sharing of knowledge and stresses on collaboration. This results in better access to products and more innovation. I think this is very significant to our present world as it may be one of the keys to solve many problems such as prevention of many preventable diseases and communicable diseases in less developing nations.

Besides that in healthcare industry, there is a move towards wellness management versus disease management. Also, there is a shift towards personal responsibility of health rather than state responsibility. We are seeing technologies such as diabetes glucose meters which save a lot of time and money. There is no more need to go to hospitals regularly to get the glucose tests done. This positive change/trend is best described by a video by Microsoft. Hence, I would put the link here, instead of talking about it. Video says it all - http://www.youtube.com/watch?v=x74reJmMzV4&feature=related

The video is very interesting as it highlights the possible future of healthcare and wellness management. I see it as becoming possible in our near future. Do you?

My personal rating of this session is 8/10. I am just a bit curious about the negative impacts/consequences of technology in this area as to me everything seems very positive :)

Session 5

Exciting theme for this session was Information and Communicational Technology (ICT) and world change. ICT is one of the fields in technology which I believe our present generation is most familiar to. ICT includes technology concerning Internet, Mass media, Gaming, Wireless technologies and Cloud computing. Before, my perception of world of ICT was limited to internet, wireless technologies and mass media only. Through this session and recommended readings, I have broadened my horizons about ICT. I learnt how ICT’s application goes beyond entertainment and communication. ICT serves as a world changing tool as it has significant applications in field of education in form of e-learning and health care in form of telemedicine.

One of the technologies that intrigued me was gaming and cloud computing. I knew very little about these technologies and the potentials that they have to bring change in the world. I used to see gaming as an area of entertainment only. I never realised how game simulations can be used and applied in areas such as medicine and transportation technologies. Similarly, I knew little about cloud computing but this session has motivated me to explore this topic furthermore. Cloud computing is the delivery of computing as a service rather than a product, whereby shared resources, software, and information are provided to computers and other devices as a utility over a common network. A surprise element about cloud computing for me and a lot of my classmates was that almost all of us have been using this technology such as Google mail and Google docs, Yahoo! Mail etc but we did not know that it is called cloud computing!

These technologies have undoubtedly changed our world. Today, it is hard to imagine life without internet, without Google. Imagine doing research assignments without Google and with piles of books in a library instead. Technology has brought everything just a click away. Besides making our life more convenient, ICT has brought many positive externalities to the poor and to less educated. E-learning has allowed millions around the world to become aware of global issues, to empower. Similarly, telemedicine has allowed doctors to reach their patients in remote areas. Besides, wireless technologies have helped farmers too. Now they are more informed of the market prices of their crops and seasonal changes. Technology has allowed them to make better decisions. The scope of ICT is limitless. It has brought information sharing and communication to an entirely new level. Bulk of information can now be transmitted in seconds. Even in politics, one can say an increasing role of ICT. Instant interaction with ministers/world leaders on Twitter or Facebook was of course not possible before.

In class we watched various videos but the one that fascinated me the most was about Poject Natal Milo. Here’s the link to the video: http://www.youtube.com/watch?v=CPIbGnBQcJY. Enjoy watching! :)

The video is fascinating because the technology can make the human looking figure, Milo in the screen so believable, to the extent that one can potentially interact with them.

This lesson also made me realise that just having a certain technology is not sufficient. For technology to be effective, its accessibility, understanding and adoption are essential. Therefore, government involvement in adoption of new technologies is significant in bringing the change in people’s lives, especially in lesser developing countries.

Another interesting observation mentioned by Prof was about the value of knowledge revolution. As mankind went through transition from being hunters/gatherers to agriculture and domestication of animals to industrial revolution, an increase in productivity of about 25 times was seen as we moved from one level to the next. Now, we are seeing time when we are moving from industrial revolution to ICT/ knowledge revolution and we have only seen five times rise in productivity thus, the question is how and after how long time will we be able to achieve further 20 times rise in productivity? When will we be able to capture the full potential of ICT/ Knowledge revolution?

My personal rating on this session 9/10

Session 4

Session 4 was one very interesting session. This is because I learnt about totally new way of looking at change. Basically, the two themes that we covered in this session were- Drivers of World Change and Change Management and Change Leadership.

The session began with a video about- Who moved my cheese? The video was about the book by Spenser Johnson, which was also adopted as a movie. The book is about change in our lives and how one should deal with the changes, i.e. adopt them. The cheese is a metaphor for and our ‘wants’. The story seems like an interesting read and I really hope to read it soon.

Then the drivers of change were looked at. Drivers of change are the underlying factors due to which change occurs. These may include but are not limited to factors such as environment, culture, completion, technological innovations and globalisation. A very interesting point mentioned by Prof was the role of Cold war as a driver of change in our world. Due to tension and strong rivalry and competition the developments in space missions accelerated and the dream of man on the moon was made possible. If there had not been Cold war, there is a likelihood that mission to moon may have occurred much later. Also, the role of globalisation was realised. For instance, in the past the distribution of power and wealth was such that the Western nations would lead the East. However, with technological innovations and globalisation, East also acquires power. The booming economies of Asian tigers well exemplify this point.  

Some key concepts learnt in the first half of this session were differences between evolutionary and revolutionary change. Revolutionary change, aka ‘disruptive’ change makes the previous paradigms seem useless and unviable. Doug Berger defines disruptive change as an ‘irreversible change in your expected future’.  However, the evolutionary change involves incremental changes. It involves improvising and overcoming the limitations of existent technology. Unlike this revolutionary change involves taking quantum leaps. So should one be evolutionary or revolutionary?

My personal opinion on this question would be revolutionary. While it is important for us to overcome short term challenges of present technology and bring evolutionary change. Revolutionary change is essential because it opens doors to new opportunities and perspectives. Also, it will direct our future and the way we do things.

The need to embrace change was also highlighted by Jame’s presentation on pollution and global climate change. An interesting aspect which was covered in discussion was the need of sustainability and steps that government of third world countries may take to achieve it. The challenges that such governments may face to prioritise conservation of natural resources was also briefly discussed. In short how economic factors may shape change was explored.

The second half of the session introduced two new concepts- change management and change leadership. A leader is a visionary who creates the conceptual framework and manager organises and make sure the task is done and keeps the vision on-going. A business can become a market maker only by investing in future innovations and not just by solving present day problems. This brings me to the two main concepts mentioned above. Change management refers to a set of basic tools or structures intended to keep any change effort under control. The goal is often to minimize the distractions and impacts of the change. Most companies work on change management. However, there is an increasing need of change leadership. Change leadership refers to the driving forces, visions and processes that fuel large-scale transformation. It concerns look into the future and recognising potential solutions to upcoming issues and problems. For further information you may look at this article by Forbes on difference between change management and change leadership. http://www.forbes.com/sites/johnkotter/2011/07/12/change-management-vs-change-leadership-whats-the-difference/

My personal ratings for this session 8.5/10

Individual Topical Review Paper- Draft!

Microfinance

Individual topical review paper on Microfinance

Executive summary

One of the major drivers of change is innovation. The development of innovations has allowed mankind to find solution of many socio-economic problems. One such innovation that has brought change in the world especially in the lives of poor is Microfinance. This paper will explore the developments of microfinance and the extent to which it has brought both economic and social change in lives of the poor. The paper would also recognise the present day limitations and criticisms of microfinance and the possible solutions to them. Later, the paper will discuss some future considerations and potentials of microfinance.

Introduction

Billions of people around the world are living in poverty. Out of which bout 1.7 billion are living in absolute poverty (Wikipedia-poverty). Often people in developing countries survive on subsistence livelihoods like subsistence agriculture. These people usually have no or little savings. This means that they have no or little income to consume goods and services or expand their businesses. They are stuck in poverty cycle. Poverty cycle is a vicious cycle of seemingly never ending poverty. One of the ways to get out of poverty is access to loans. However for many, access to loans is hard due to lack of collateral.

This problem (above) highlights the need of availability of financial services to these poor individuals. Microfinance serves as an answer to never ending poverty as microfinance is the provision of financial services such as loans to low income clients who often lack collateral.

This paper will refer to microcredit in many instances. Microcredit is a part of microfinance and means provision of small loans (of value $50 to $100) to the very poor. The provision of loans lets the poor to start their own small businesses and earn income to help their daily needs. Small loans may be offered along with training for basic entrepreneur skills and have to repaid with interest. Microcredit forms a crucial part of microfinance and therefore, it is important for us to study the effect of microfinance through microcredit.

The innovation of modern microfinance has helped changed the lives of many. It is argued that microcredit stimulates self employment encourages entrepreneurship in areas such as fishing, carpentry, agriculture.

Development of Microfinance

Historical perspective

Historically moneylenders have been one of the major sources of financial services such as provision of loans. Money lenders may be organised in form individual or family businesses. Credit would often be granted on recommendations and guarantees to persons well known to them. Loans would also be granted against collateral or securities such as gold and land and that too on high interest rates[1].

Gradually, informal money lenders were replaced to a large extent by commercial banks. Commercial banks are more organised and formal but still usually require collaterals before the loans can be provided. This implies that the poor have little access to financial/ banking services. Perhaps, this is the reason why the poor go to moneylenders and sadly often get exploited.

Since, the money lenders charge interest rates higher than the market rate and the poor people find it hard to repay back the loan, the problem of indebtedness begins. Borrowing money from informal sources is risky as misuse of money or use of money to afford daily goods such as food may result in situation where loans are used for short term benefits only. This starts cycle of indebtedness and poverty.

Credit unions and lending cooperatives and formal credit and saving institutions to serve the poor have been around for decades as well. Other sources of informal credit to the poor were charities, relatives etc.

Then in early 1700s, the Irish Loan Fund system began. It was started by author and nationalist Jonathan Swift and it is one of the earlier and longer-lived micro credit organizations that provided small loans to rural poor with no collateral. Swift's idea began slowly but by the 1840s had become a widespread institution of about 300 funds all over Ireland[2].

However, the credit of innovating modern microfinance, especially microcredit is given to Dr. Mohammad Yunus. Yunus began experimenting with lending to poor women in the village of Jobra, Bangladesh in 1970s and he later found the Grameen Bank in 1983.

Today, the World Bank estimates that about 160 million people in developing countries are served by microfinance[3].

Microfinance began as a means to alleviate poverty and not as a business. Helping poor people to create sustainable livelihoods is still the main aim of microfinance institutions. However, is microfinance sustainable? Can it reach the masses that need it most? These questions raise the conflict between serving the poor and profitability. It increases the need to make microfinance sustainable so that it can pay for itself[4]. So gradually, microfinance is now moving from charity to sustainability.

Current situation

     Benefits of microfinance

Social benefits

1.      Benefits to women-it helps empower women

   Microfinance has allowed different communities to recognise the important role of women i.e. beyond the traditional perception that women are supposed to stay at home and tending to families. Majority of the clients of microfinance are women and 33 percent are men (who are clients of microfinance)[5]. Women are also 'human capital' and they are resources which are underutilised in many rural economies as they are often not allowed to get educated and work.

Through microcredit women are allowed to work independently and live a more respectful life. It should be realised that women's poverty typically results in physical and social underdevelopment of their children[6]. Hence, when microcredit is given to a woman or group of women, they are able to start their own businesses and generate income and wealth for families.

2.      Benefits to community

Microfinance and its services can greatly benefit communities and societies as the income that a family or an individual generates can in future be invested in education of children or healthcare.

Also, if more people in the community are happy or rather satisfied with their lives then there is likelihood that the crime rate or depression and suicide rates within the community may decrease.

Furthermore, self-employment along with some training regarding finance and marketing skills has made individuals more independent. Especially in areas such as agriculture and handicrafts where the middlemen would take advantage of the poor were not able to sell their products in markets directly.

Economic benefits

1.      Short term benefits

Often, the poor are stuck in poverty cycle because they have little or no source of income. When the incomes are low then it is inevitable to have little or no savings. Microfinance stimulates self employment and therefore, allows the poor to earn income and save and gradually get out of the poverty cycle. It help reduces the material poverty i.e. the physical deprivation of goods and services.

2.      Long term benefits

It is argued that microfinance results in economic development. Economic development refers to improvement in people's standard of lie as a result of economic growth. Many families have been able to send their children to school for education. One success story that exemplifies the points stated above:

La Maman Motuke used to live in a broken car in Zaire with her four children. She could not afford to feed her family as she had no means to do so. However, her life changed when her skill of making chikwangue (manioc paste) was recognised and encouraged by Microcredit Summit. After six months of training in production and marketing techniques and first loan of $100 USD, Maman Motuke started her own business. Today she rents a house with 2 bedrooms, sends all her children to school and is able to feed and dress them well (Marber, 2003, p. 133).

On the whole individuals all around the world may benefit from microfinance. Microfinance and its implementation contribute to achievement of Millennium Development Goals (MDGs).According to "Microfinance and the Millennium Development Goals (MDGs): A Reader's Guide", “Microfinance is one of the practical development strategies and approaches that should be implemented and supported to attain the bold ambition of reducing world poverty by half.[7]”

The figures and facts below exemplify the extent to which microfinance is beneficial: ³

- In Bangladesh, Bangladesh Rural Advancement Committee (BRAC) clients increased household expenditures by 28% and assets by 112%. The incomes of Grameen members were 43% higher than incomes in non-program villages

- In El Salvador, the weekly income of FINCA clients increased on average by 145%

- In India, half of SHARE clients graduated out of poverty.

Furthermore, microfinance help meet the goal of gender equality and empowerment of women. For instance, The Women’s Empowerment Program in Nepal found that 68 percent of its members were making decisions on buying and selling property, sending their daughters to school, negotiating their children's marriage, and planning their family. Traditionally male members of families have been in charge of these activities[8].

Similarly, it is argued that when loans are taken and income is generated through microfinance, extra incomes are used further in education and health care. This means that microfinance may help contribute to MDGs concerning universal education and combating of HIV/AIDS, malaria and other diseases.

Like Mama Motuke, more families are sending their children to schools and living healthier life.

Limitations

Microfinance has certain limitations. Microfinance services such as microcredit are most effective for clients who have the ability to use the loan effectively and ability to use their generated income to pay back loans with interest. They should be able to generate income faster than rate at which they are paying interest rate[9]. If the clients fail to repay back their loans, then indebtedness is an inevitable issue.

Populations that are geographically dispersed or nomadic may not be suitable microfinance candidates. Microfinance may not be appropriate for populations with a high incidence of debilitating illnesses (e.g., HIV/AIDS). Dependence on a single economic activity or single agricultural crop, or reliance on barter rather than cash transactions may pose problems. ³

The presence of hyperinflation or absence of law and order may stress the ability of microfinance to operate. Microcredit is also much more difficult when laws and regulations create significant barriers to the sustainability of microfinance providers (for example, by mandating interest-rate caps). ³

The lack of regulation is an issue that needs to be paid attention to. Poor countries where microfinance is most needed also tend to be countries with weak financial institutions and little ability to supervise them. If there is no authority like government to set rules and regulations and supervise, then the poor become more vulnerable. Without proper regulations there saving can be in risk. Hence, lack of regulation is one of the major limitations faced by microfinance.

Microfinance also often faces lack of funding. Major source of capital for many microfinance institutions (MFIs) are foreign donors, national governments and charities. MFIs may have high operating costs especially when they are small in size. If there is lack of funding it is hard for them to remain in the market. Therefore, it is important to recognise the means by which global investors can be attracted to create social businesses where the poor can be helped.

Criticisms and other issues

One may realise that most of the criticisms of microfinance are criticisms of microcredit.

Firstly, many microcredit sources charge high interest rates. According to Microbanking Bulletin reports in 2006, microfinance institutions charged interest rates as high as 22.3 per cent. On one hand, high interest rates make it harder for the poor to repay loans. Repayment becomes even harder when situations such as inflation (general and sustained increase in prices of goods and services) in economy increase. Such high interest rates make poor people's situation worse and pioneer Muhammad Yunus even believes that institutions that charge interest rates higher than 15 per cent should be penalised.

On the other hand, having high interest rates is considered reasonable as microfinance institutions also need capital to continue to operate. The source of funding is donors and if money is not repaid with interests then microfinance can not be sustainable. The issue of interest rates again highlight the need of proper regulations. Moreover, having high interest rates is reasonable when the alternatives such as informal moneylenders charge rates even higher.

Secondly, it is claimed that microcredit serves as another source of funding and the credit through microfinance institutions is misused. For instance, husbands take advantage of new funds and use it on their own consumption rather than investing these[10].

Clients may also take advantage of quick and easy credit from more than one institution. In many cases they borrowed more than they needed and even began 'bicycling' loans- i.e. paying of one loan using credit from another institution[11].

Problems of bicycling loans and misuse of loan money highlights that there is lack of education and awareness. 'According to Juan Domingo Fabbri of BankoSol's marketing department, 'multiple loans have even become a status symbol' (Rhyne, 2004, p. 145). Also there is a perception that more loans is more security and less risk. This viewpoint among the poor is dangerous and hence there is a need of awareness programs.

Future considerations

Muhammad Yunus, the founder of Grameen Bank holds a vision of total eradication of poverty from the world. He believes credit is the last hope to come out of absolute poverty and believes that the right to credit should be recognised as a fundamental human right.

Currently, microfinance faces many limitations and criticisms. So would each individual will be able to enjoy the right to credit in the future?

To enable each individual to enjoy the benefits of microfinance, firstly there is a need to overcome the limitations of microfinance. To eliminate poverty from the world, there is a need of joint efforts and contribution. The contribution by the rich and powerful should not be limited to charity only. Charity can only be helpful for a short term. There is need for strong support for social entrepreneurs. Globally social entrepreneurs should be encouraged to make process of globalisation friendly to the poor [12] (Yunnus,2007,p.249).

According to Yunus, there is a need of social-objective-driven investors and institutions. Along with proper regulations, these institutions shall run and invest in research and develop and come with innovations that solve the problems of poor. Research and investment may be done in areas of flexible savings, loans for education and health and micro insurance. In short, in future financial institutions may be developed that can create and provide wide range of micro financial services.

The role of government should be recognised. Governments have to play an important role of setting a framework of rules and regulations that allow microfinance to work sustainably. Also, there is need to allow microfinance to integrate with mainstream financial systems. The framework is necessary to let the expansion of microfinance to occur at an accelerated rate. More accessibility to microfinancial services by more individuals means greater opportunities for people to come out of poverty.

With regulations the donor confidence in microfinance institutions would also rise because regulations transparency and good governance.

Similarly role of media should also be recognised. Social and mass media tools such as internet and television would help increase awareness about MFIs among the needy, potential donors and supporters of microfinance. Hence, media serves as a medium to increase the reach of microfinance to more people.

Yunus also believes in the potential benefits of information and communication technology (ICT). Yunus wants information to be available to everyone, even the poor. Microfinance can be integrated with information and communication technologies such as internet. For example, GrameenPhone brings internet- enabled phones to the Grameen borrowers who then become 'telephone ladies' of the village. By March 2003 more than 25, 000 telephone ladies were selling telephone services in Bangladesh (Yunus, 207, p.254). Many phones are even solar powered and this exemplifies how economic growth within communities can be generated sustainably.

Furthermore, the concept of microfinance can be expanded and integrated with other industries such as health and education. By integrating health education with microfinance community groups we can create a synergistic effect between the two, helping the poor to protect against and cope with health and financial shocks, seize economic opportunities, meet life-cycle needs and build assets.[13]

Another example of microfinance going beyond provision of financial services is HealthStore Foundation in Kenya. 70 per cent of population of Nairobi, Kenya lives in rural areas and 80 per cent of doctors live in cities. This shows that people in rural areas have little access to healthcare because it was too far and/or expensive. HealthStore Foundation solves this problem by provision of microloans to residents of villages and training in basic health services[14]. Now the clinics offer essential drugs and health care services in remote areas and regular inspection and checking by HealthStore Foundation ensures safety.

Conclusion

Microfinance is a disruptive innovation as it has brought change in many people's life. Even though there are many limitations that the field of microfinance faces, it should be recognised that it has developed significantly. The experimental idea that began in a village of Bangladesh has expanded and reached many around the world. It is proved to be feasible and brought benefits not only in Asia and Africa, Latin America but also among the poor in America and Europe. Microfinance, the concept that began as a social activity is now becoming an industry where the poor benefits and empower. On the whole it has brought both social and economic change in the poor regions of our world.

However, one should recognise the criticism of microfinance and microcredit and then try to eliminate these criticisms and limitations through a holistic approach and joint efforts. Constructive feedback and research may be used effectively to keep improvising and developing the model of microfinance so it meets the need of changing time. A proposed manner to achieve this is by integrating microfinance not only with mainstream financial systems but also other industries. At the same time, government intervention and regulations are required.

In future, while improvising the present day microfinance, expansion opportunities of microfinance should be determined. Increasing support from media and government may help increase awareness about microfinance. Also, other technologies such as information and communication or biomedical may be exploited and integrated with microfinance so that the world of microfinance can grow beyond 'finance'.

Then hopefully, along with other measures taken to alleviate poverty, we may be able to see the world without poverty. We may be able to see each individual with right to credit.

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[1] A Typology of Informal Credit Suppliers: MONEY LENDERS. (n.d.). GDRC | The Global Development Research Center. Retrieved October 5, 2011, from http://www.gdrc.org/icm/suppliers/ml.html

[2] Osborn, B. (n.d.). The History of Microfinance | Global Envision. Global Envision | The Confluence of Global Markets and Poverty Alleviation. Retrieved October 6, 2011, from http://globalenvision.org/library/4/1051/

[3] About Microfinance | Kiva. (n.d.). Kiva - Loans that change lives. Retrieved September 30, 2011, from http://www.kiva.org/about/microfinance#theHistoryOfModernMicrofinance

[4] Harper, M. (2003). Introduction. Microfinance: evolution, achievements and challenges (p. 7). Warwickshire: ITDG.

[5] Who are the clients of microfinance?. (n.d.). CGAP. Retrieved October 2, 2011, from www.cgap.org/p/site/c/template.rc/1.11.947/1.26.1304/

[6] Marber, P. (2003). Wealth and Family: From survival unit to psychic sustenance. Money changes everything: how global prosperity is reshaping our needs, values, and lifestyles (p. 133). Saddle River: Financial Times Prentice Hall.

[7] Kesner, L., International, S. o., Affairs, P., & University, C. (n.d.). MICROFINANCE MATTERS - Redefining Microfinance as a Strategy to Achieve the MDGs. UNCDF / FENU. Retrieved October 7, 2011, from http://www.uncdf.org/english/microfinance/pubs/newsletter/pages/2005_09/update_redefining.php

[8] Littlefield, E., Morduch, J., & Hashemi, S. (2003).  Is Microfinance an effective strategy to reach Millennium Development Goals. CGAP Focus Note, No.24. Retrieved October 8, 2011, from http://www.cgap.org/gm/document-1.9.2568/FN24.pdf

[9] When is microcredit not the answer?. (n.d.). CGAP. Retrieved October 8, 2011, from www.cgap.org/p/site/c/template.rc/1.11.947/1.26.1313/

[10] Quddus, M. (n.d.). Yunus Centre :: A rebuttal of the criticism of microfinance. Yunus Centre. Retrieved October 9, 2011, from http://www.muhammadyunus.org/Yunus-Centre-Highlights/a-rebuttal-of-the-criticism-of-microfinance/

[11] Rhyne, E. (2001). Competition, commercialization and the crisis of microfinance. Mainstreaming microfinance: how lending to the poor began, grew, and came of age in Bolivia (p. 145). Hartford: Kumarian Press.

[12] Yunus, M., & Jolis, A. (2003). The Future. Banker to the poor: micro-lending and the battle against world poverty (p. 249). New York: Public Affairs. (Original work published 1997)

[13] Financing Healthier Lives - The Microcredit Summit Campaign. (n.d.). The Microcredit Summit Campaign. Retrieved October 10, 2011, from http://www.microcreditsummit.org/financing_healthier_lives/

[14] Christensen, C. M., Baumann, H., Ruggles, R., & Sadtler, T. M. (2006). Disruptive innovation for social change. Harvard Business Review, 84(12), 94-101. Retrieved October 22, 2011, from the EBSCO Host database.

Individual Topical Review Paper- Outline!

Innovation of interest: My innovation of interest is Microfinance. Microfinance is an interesting economic innovation with many benefits and limitations. Hence, I would like to explore this area. However, to further narrow down my topic, I would focus on microcredit. Microcredit is part of microfinance and may be defined as small loans that are given to people in poverty to start small scale businesses.

Rationale for selection: I have chosen Microfinance (microcredit) as my topic because it is undoubtedly a disruptive innovation. Microfinance is a novel way to engage people in poverty in self employment to allow socioeconomic development to occur.

The idea of microcredit began in 1970s in Bangladesh and has since helped improve lives of many people not only in Bangladesh but many developing countries around the world.

·         Executive summary

This paper will explore microcredit and the extent to which it has brought both economic and social change in people’s lives. The paper would also recognise the present day limitations of microcredit and how may it improve and expand in the future.

·         Background introduction

Microfinance is the provision of financial services to low income clients to stimulate self-employment. Microcredit is part of microfinance and refers to provision of small loans to low income clients who may have no or little access to conventional form of loans due to lack of collateral.

·         Historical perspective

Microcredit originated only about 3 decades ago by Muhammad Yunus in Bangladesh and Grameen bank is the microfinance organisation where Yunus began the concept of microfinance. One of the major sources of credit for the poor was private lenders. However, they offered credit at high interest rates and also required collaterals. Poor people such as farmers would often get exploited due to lack of collaterals and/or high interest rates.  

      Problem of indebtedness trapped them in poverty cycle.

·         Current situation

Today, microfinance through microcredit has allowed the poor to start their small size businesses. Microfinance is expanding to various countries in Asia, Africa and Latin America through various microfinance institutions.

Highlight the social and economic impacts (positive and negative) of microcredit

Potentials of self help groups and other services of microfinance may also be highlighted.

Present day criticisms and limitations of microcredit such as lack of information/awareness, funding etc will also be explored

·         Future Consideration

-The use of internet to increase awareness about microfinance and microcredit.

-Possibilities of government involvement to establish legal and proper regulations for the system to run efficiently and to run more microfinance banks

-Solve the problem of lack of funding through increased involvement of government and international organisations such as World Bank and United Nations

-Would each individual have the ‘right to credit’?

Session 3

This week the two themes that we discussed in class were- Technology and industrial development and technology and innovation management. Basically we learnt about both the positive and negative consequences of industrialisation. Though industrial development has played an important role in economic development of countries, it has also played an important role in global environmental degradation. Hence, today’s challenge is to promote the positive effects of industrialisation while minimising its negative side effects. It was recognised that sustainable industrial development is the need can be strongly helpful in eradication of poverty.

Furthermore, I learnt how industrialisation has served as an engine for growth in LEDCs. An aspect which I find is quite interesting about the manufacturing industry (secondary sector) is how it links the primary sector to tertiary sector. I think the ‘linkage and spill over effects’ of industrialisation is an interesting area for exploration. The advantages of promoting manufacturing industry in an economy exemplified the interesting concept of ‘advantages of backwardness’ and how it stimulates economic growth and development in a country.

Also we saw how governments and businesses may work together in area of innovation such as investment in research and development. We also discussed how the need to change has become vital. For instance, economic growth with environmental well being may be achieved by ‘cyclical’ business and industrial models.

The challenge of achieving sustainable growth was again exemplified by a presentation of industrial plants causing environmental degradation. The presentation was interesting as it explained that many industrial plants located close to water bodies are a threat to marine life/ecosystems. In order to cut down on costs and maximize profits businesses are using non eco-friendly production systems. At the end of presentation, we had a productive discussion about challenges that businesses are facing regarding profit making and their social responsibility.

In the second half of this week’s session, we explored the area of technology and innovation management. I enjoyed one of the readings by UNDP Human devilment report. The report includes a visually interactive map about present and potential leaders in technology innovation. It mentions the Technology Achievement Index (TAI), an index that measures nation’s ability to participate in networking age.

 I think this is a very unique way to measure nation’s development and is highly relevant to us in these changing times, when access to technology is imperative for growth and development.

Here is the link to the mentioned report: http://hdr.undp.org/en/media/completenew1.pdf

I was also intrigued by the video titled ‘the Story of Stuff’ by Annie Leonard. This is a very interesting video as it reflects upon our materialistic society. It highlights the amount of consumption and waste that is resulting due to ‘linear’ production systems.

Some interesting concepts that the video highlights are- ‘Planned obsolescence’ and ‘Perceived obsolescence’. It shows how planned and perceived obsolescence is practiced to contribute to more and more wastage of resources.

'Planned obsolescence is a business strategy in which the obsolescence (the process of becoming obsolete) of a product is being planned and built into it from its conception.' source: The Economist-Planned Obsolescence.  

http://www.economist.com/node/13354332

Perceived obsolescence convinces us to throw away useful goods as the businesses would change the physical appeal of products.

In this session we also looked at different types of innovation i.e. Market driven and Technology driven innovation. It was realised that 3 different types of innovation opportunities may be observed in every industry. This includes, valley opportunity, summit opportunity and cloud opportunity.

At the end another presentation was done on electronic cigarettes and change management. During the presentation the various challenges that a business may face during production cycle were recognised. Moreover, a productive and interesting discussion took place on the issue of legalising electronic cigarettes in Singapore.

 I enjoyed being a part of this session and would rate it 9/10.