OxBowBusiness

Top Down or Bottom Up?

At last someone has the brains to agree with me. After years working in developing/emerging economies, I have spent many hours trying to convince all and sundry that bottom up development is the best way to approach many things to do with economic development.

I'm not just talking about developing economies here either; but developed economies should take note too. Of course the money for development has to come from the top to pump prime things, from governments and, in some economies, state owned enterprises.

So who is as smart as me then? Well, it's none other than billionaire Vinod Khosla who helped to found Sun Microsystems and then made his name and his fortune as a partner at Kleiner Perkins, a Silicon Valley venture capital firm famous for its early investments in AOL, Amazon, Compaq and Google. Mr Khosla wanted to help his relatives and friends in India but ...

When [Mr Khosla] tried to start a project to help the mother country, he was initially frustrated by its bureaucracy and corruption. His first attempt to start a traditional top down charity failed, so he now funds only charities embracing micro enterprise approaches. A lesson he learned from India, he says, is that one has to think big: “Unless you influence the lives of at least a million people, it simply doesn't matter.”
(See A healthier addiction 23rd Mar 2006 The Economist)

Although micro enterprise approaches have proven exceptionally effective, I don't say that they are the only way to approach the development problem. Indeed, I have been primarily involved in Small and Medium sized Enterprise (SME) development; but this, again, has been largely a bottom up solution using top down funding.

Oh how wise we are!!


Duncan Williamson

posted by Duncan Williamson @ 4:05 PM