Giving Compass' Take:

• Lincoln Wilcox discusses how organizations and individuals need to understand that long-term sustainable solutions come from market-creating innovation, meaning that new products that are simple and affordable will become consumable. 

• How can donors support organizations pushing market-creating innovation over short-term solutions? 

• Read about the relationship between market-creating innovation and sustainable infrastructure.

Many organizations continue to focus on short-sighted solutions because the conventional system for helping the poor incentivizes it. People who donate money to a nonprofit often want reassurance that their contribution will directly help those in need. The unintentional outcome is a system that prioritizes quick, visible results, even if they come at the expense of long-term progress. Sustainable development is a longer, more complex process, but it yields powerful results that will help people live better lives indefinitely, not just during the lifetime of a well.

In our research studying the causes of prosperity, it has become clear one of the surest avenues for sustainable, inclusive growth is what we call market-creating innovation. Market-creating innovations transform previously expensive, complicated products into ones that are simple and affordable, such that new populations of people can begin to consume them. In so doing, as their name suggests, these innovations build new markets. And in contrast with donated solutions, the innovations supported by these new markets are inherently sustainable, since both the producers and consumers have a vested interest in ensuring the market succeeds and continues to function in the long term.

Certainly, as the story of the star thrower teaches, it is virtuous to persist in efforts to do good even when results seem insignificant. But that also shouldn’t become an excuse to accept inadequate results and stop striving to find and implement better solutions. By taking the time to understand what causes prosperity and then implement it where it’s needed most, we’ll not only be doing good, but doing it better.

Read the full article about sustainable solutions by Lincoln Wilcox at Christensen Institute.