More than 50 top entrepreneurs, scholars, nonprofit leaders, government officials, and other thought leaders convened September 16-17, 2009, at the John F. Kennedy School at Harvard University for the second annual Global Empowerment Meeting hosted by The Empowerment Lab at the Center for International Development (CID). Established with a seed grant from the MPOWER Foundation, The Empowerment Lab focuses on research to promote economic inclusion, finding sustainable ways to empower the global poor by providing access to markets.
The agenda focused on opportunities and challenges for financial empowerment in developing countries, with the goal of extending markets and financial services to more than two billion people who are currently unbanked or under-served. Technology and regulation were key themes for this year's event, as well as a discussion on the effects of the financial crisis.
The keynote address was delivered Sept. 16 at the Harvard Faculty Club by Dr. Andrés Velasco, Minister of Finance, Chile, and a former professor at Harvard Kennedy School. Ricardo Hausmann, HKS Professor of the Practice of International Development and CID Director, moderated the Sept. 17 meeting, which included a luncheon keynote featuring Dean David Ellwood of the Harvard Kennedy School and Lant Pritchett, HKS Professor of the Practice of International Development.
"Inclusion in a market economy is a crucial component of individual economic welfare," commented Suzi Sosa, MPA/ID 2001 and president of MPOWER Foundation. "More than two billion people around the world lack access to basic financial services. There is no way we can hope to solve the problems of financial inclusion without research into the systemic causes. But that research would be futile if it is not disseminated to the world. That's why we bring policymakers, academics, regulators, and entrepreneurs into one room together."
Participants agreed that progress in the area of financial regulation could have a powerful effect on improving access for people not currently using banking services. Regulation of financial products and services -- including laws surrounding consumer protection, privacy, and lending -- can also limit access to financial products and have counterproductive effects. Participants sought solutions that enhance access for individuals while maintaining financial prudence for institutions.
Providing a broad perspective on how countries develop, Hausmann presented research on product space networks, in which countries grow by upgrading from current export products to other, more sophisticated, related products. "At CID, we're interested in why some countries are poor, some are rich, and how the poor can become rich," he said. "If you think in this paradigm about how a country develops new capabilities -- and how to leverage those capabilities with other countries -- it offers answers of how nations make that leap to development."
Roy Sosa of MPOWER pointed out how this macro analysis can be applied at the micro level, as small retailers innovate to expand their businesses, developing new capabilities. For instance, small business owners in developing countries may expand from standard retail shops into serving as access points for mobile technology, mobile banking, and other services that empower their customers.
The technology discussion focused on opportunities created by the explosion in product innovation and rapid penetration of mobile technology in previously remote areas. The growth of technology creates opportunities for digital banking, mobile purchases, and transactions beyond the financial sector in health interventions and mobile education. The adoption of mobile phones has also created a rich store of digital information regarding markets, networks, and individual behavior. Researchers and policymakers wrestle with questions regarding privacy, property rights to information, and ownership of and access to mobile applications that people use to change their lives.
Academic participants at the meeting included Asim Khwaja, Associate Professor of Public Policy, Harvard Kennedy School; Rema Hanna, Associate Professor of Public Policy, Harvard Kennedy School; Iris Bohnet, Professor of Public Policy, Harvard Kennedy School; Dr. Julio Frenk, Dean, Harvard School of Public Health; Peter Tufano, Professor, Harvard Business School; Shawn Cole, Associate Professor, Harvard Business School; Yale Professor Dean Karlan; Andrew McAfee, MIT Center for the Digital Age; and MIT Professor Sandy Pentland.