Can technology solve poverty?
Investors believe the future of technology is less about gadgets and more about solving social issues. Nicole Kobie shares all
Why investors believe the future of tech is less about gadgets and more about social issues.
Poverty isn’t a tech problem – but technology and startups could help lessen its effects. That’s the argument made by social innovators, who would rather spend their intelligence, millions in funding and valuable time on tackling social problems than connecting random objects to the internet (I’m looking at you, Kuvée wine bottles).
Can startups really build a better future for those being left behind? Telefonica’s accelerator Wayra and investment firm Big Society Capital believe so.
They’ve teamed up with the Joseph Rowntree Foundation and local finance firms to start a new accelerator in Oldham called Wayra Fair By Design that aims to tackle the UK’s poverty premium. That’s when people who already have less money end up paying more for goods and services than their richer counterparts, because they can’t pay upfront to get a discount or have a poor credit rating. According to a report by the University of Bristol, this poverty problem costs an average of £490 per year.
The accelerator is looking at ways to improve how lower-income Brits pay for energy bills, insurance premiums and other daily costs, as well as how they access finance and loans. “There is absolutely no reason that poor people should pay more for the same services just because they are poor,” Wayra UK director Gary Stewart told PC Pro.
Do we need startups to solve what’s surely a mistake in how companies charge customers? “To some extent, all startups exist to solve a problem suffered by a large segment of society and to commercialise that solution,” argued Stewart. “That being said, I think that entrepreneurs have to realise that for every problem that we solve, we might create another problem in turn.”
Look at Uber et al. Those working in the so-called gig economy are well aware of the consequences of technology innovation, and are now left fighting to be paid a minimum wage – hardly helping to battle poverty. “If we can figure out how to get cheaper taxi rides across the globe, why can’t we figure out how to improve the lives of some of society’s least fortunate?” said Stewart. “If we really wanted to do it, the poverty premium could be eradicated within our lifetime.”
Encouraging a conscience
How can we encourage startup founders to build a better world? Wave some cash in their faces.
There’s enough cash sloshing around startups to spare a chunk for social issues, and some investors will only take a punt on entrepreneurs who are addressing such concerns. Future Planet Capital (FPC) is one such funder. “We look for proven technologies that can scale up and address the biggest problems facing
the planet, covering climate change, education, healthcare, security and sustainable growth,” executive chairman Douglas Hansen-Luke told PC Pro. “The startups FPC looks to invest in always have a view to making the world a better place.”
FPC isn’t a charity — it needs to get a return on its investments to keep the cycle of funding projects for good going. Hansen-Luke said such projects stand to make as much as their less socially responsible counterparts. “Addressing the world’s biggest problems means there is huge scale on offer, and therefore huge returns,” he said. “Curing diseases, solving climate change [and] improving waste recycling would lead to massive returns both financially and socially. Our mission at FPC is to profitably impact the world’s greatest challenges.”
He added: “We hope that once we have shown global issues can be profitably and positively impacted by tech startups, more businesses and more startups will look to follow our lead.” If helping pull people out of poverty isn’t motivation enough, making cash while doing it hopefully will be.
More social projects
The government’s futures and technology quango Nesta argues digital social innovation is already on the rise. Peter Baeck, head of collaborative economy research, helped map projects using digital and other technologies to address social issues across Europe. It found there’s already more than a thousand. “A lot more attention and money is going to tech projects with a social aim,” Baeck explained. “Four years ago, I was scrambling around for examples. That’s not the case anymore.”
However, they’re being held back by a lack of funding and digital skills shortages, meaning they can’t scale up enough to make a real impact, a Nesta report found. “Most of the money is going to fin tech and social sites, and that’s understandable and there’s nothing wrong with that,” Baeck told PC Pro. “But the question is how to use the same technologies that power Google, Amazon and Facebook for social challenges.”
One way to address the problem is pairing startups (and others with tech skills and innovative solutions) with pre-existing charities. Those working on the front-line of issues such as poverty know which problems are most in need of attention and the history of failed solutions, but often lack the skills to make use of digital platforms or technology to solve the worst challenges. “They could really benefit from tech,” Baeck said, adding such help could raise awareness of problems and existing solutions, mobilise supporters, and raise funds.
It just may work
All of this may sound like wishful thinking, expecting technology to help build a better future by addressing social issues such as poverty. But Hansen-Luke offers a history lesson. “There is huge inequality in the world but we must never forget that it is innovation, technology and trade that have pulled over a billion people out of absolute poverty in the last 20 years,” he said. “This is a fact of far greater importance than the handful of self-made tech entrepreneurs that have emerged from innovating great products.”
And if the possibility of such efforts helping to build a better future isn’t motivation enough, there’s another reason the startup community may want to put some effort into helping the rest of us, Stewart noted. “There is an ever-increasing reality that some people are being left behind while others become billionaires and unicorn masters, and artificial intelligence might make this worse,” he explained. “If we aren’t careful, those who aren’t benefitting from the system might begin to see entrepreneurs the way they might have viewed bankers in 2007.” Take note, founders: save the worst off, and you might just save yourselves.