Innovation Creates Social Injustice, Yes/No?

By Jonathan Lewis

Lester Thurow’s Fortune Favors the Bold reports that in 1900, when colonial empires were the norm, the world was much more globalized that it is today. Fifty nations governed the Earth and many of those were independent in name only (think of the Monroe Doctrine for Latin America). Today, almost 200 countries have voices at the U.N.

Then and as now, economic and political power were intertwined. The global market for cotton (primarily from the British Empire) was met by the American South which produced two-thirds of the world’s cotton on the day the Civil War commenced.

Before the American Civil War, Eli Whitney, a social entrepreneur/inventor backed by a venture capitalist, invented the cotton gin which increased cotton production 90-fold. His innovation underpinned the American South’s capacity to meet global demand for cotton, sparked an economic boom that built the good life for southern gentry and locked in slavery until a war ended it. “Slavery was the first significant American public policy that served to protect cotton growers from the perils of operating in a competitive market.” (Travels of a T-Shirt in the Global Economy)

Economic progress and mechanization (yesteryear’s computerization) usually has unintended consequences. The cotton gin extended slavery and created the conditions for a civil war to preserve a nation and to make good on a commitment to civil and economic justice which remains, even today, the American national fault line.

Technology, innovation and labor-saving devices are, of course, prerequisites for progress. But, social entrepreneurs and social philanthropists respond with Pavlovian mindlessness to “innovation” as an unadulterated societal good.

Today, the industrialized world is mostly losing jobs to computers, robots and system efficiencies, not “outsourcing”. Innovation is the job killer. Once upon a time, I handwrote memos on a paper tablet and a secretary typed a rough draft for me. Today, I make my own typos on a laptop. The steno pool was fired.

Globalization: A Rorschach test word which connotes a theory of political and economic change which, in turn, reflects one’s own ideological ideas about power and one’s standing in the world. When you wear a cotton t-shirt, think about it.

About Jonathan Lewis
Jonathan C. Lewis has had three varied careers: social entrepreneur, business leader and government policy executive. Since 2002, he has devoted himself to global poverty issues and, in particular, microfinance.

MicroCredit Enterprises, which Jonathan founded in 2005, is an innovative, not-for-profit social venture which leverages private capital to make tiny business loans to deeply impoverished people, mostly women, in developing countries. Under his leadership, within 3 years MicroCredit Enterprises has grown to $40 million in guarantees and $20 million in overseas lending capacity. MicroCredit Enterprises has an enviable operating budget under 3% of loan portfolio and has achieved operational self-sustainability without a dime of traditional donations or grants. A rarity in the non-profit world, MicroCredit Enterprises is entirely open source and is primarily operated by 40 pro bono business executives and professionals.

Jonathan is also the founder and chief executive officer of the Opportunity Collaboration which is non-aligned forum using the power of connection and community to advance economic justice and alleviate poverty. Annually, this by-invitation-only congress convenes 200 entrepreneurial leaders and thinkers on World Poverty Day to leverage resources, combine forces, share innovations and operate more effectively.