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.

Session 2

The themes for session 2 were ‘Technology, society and global dominance’ and ‘Technology and Human Development’. Firstly, we discussed the dimensions of global dominance. Here we looked at examples of dominant or leading players in different fields and industries such as social, cultural, military, industrial and economical.  A key take away from this discussion was that leaders or dominant leaders in respective areas share the characteristics of being open minded and optimistic. To be successful, a company, society or an individual will have to be like ‘Rising Stars’- meaning they have to keep investing in new ideas or ways of doing things. I believe this is highly relevant to all of us.

Later, we looked at how colonialism has played a role in shaping world economies today. We saw how Europeans imposed not only economical but also cultural and political dominance over their colonies. The impact of colonialism in terms of exploitation and wealth was discussed and shown through a graph. I found the graph interesting as it visually explains how the world dominance has been changing. An almost cyclical pattern of change in transfer of dominance may be noticed with the changing times.

Furthermore, I also found the article about pop culture interesting as it highlights issues that are relevant to us today. Pop culture may be seen as one of the disadvantages of globalization as it is resulting in decline of traditional means of entertainment.  For example, the Hollywood movies are dominating over the other cultural movie industries such as French. Similarly, the rise in number of reality TV shows exemplifies the decline of television (creativity).

Then, I enjoyed the presentation on China gaining dominance in area of clean energy. From the presentation I learnt that China is the leading producer of low cost solar panels and wind turbines. I was intrigued by the fact that when China has been successful in producing clean energy at low cost, the other countries such as USA are criticizing China. This shows that perhaps, other nations are more worried about their economies as China becomes more competitive than the issues like global warming.

In the other half of the lecture, we looked at the link between technology and development. The different factors that may affect development of a country such as type of government, access to technology were discussed. It was realised how the Millennium Development Goals may be achieved using technology.

Something that I liked most about today’s lecture was the video by BBC. I loved the manner in which Hans Rosling allowed us to visualise the 200 years history of about 200 countries within 4 minutes as he linked the lifespan and income of people I respective times. A direct relation between income and lifespan of world population could be seen and the ways in which drastic events such as the two World wars affected the development of people.

I would rate this session 9/10. I wish we could have explored more the different factors that create differences in the extents to which a region is able to develop.