Giving Compass' Take:

• Efosa Ojomo explains how market-creating innovation and sustainable infrastructure are linked, but governments must discover how to fund initiatives that matter with products that will help lift people up out of poverty. 

• How could private sector capital help make innovations more affordable? 

• Read about the future of sustainable city infrastructure. 

On the surface, transferring resources to poor countries makes sense. Unfortunately, it’s not always a sustainable strategy.

Resources are a community or an organization’s most tangible assets. They include things such as products, equipment, buildings, and even people. Every year, with good intentions, many development organizations transfer billions of dollars worth of resources into poor communities—but they often don’t last. Products that are donated such as tablets or laptops for schools, and medical equipment for hospitals, break over time. Food and vaccines spoil, while community resources such as roads and rail break down. Virtually every single resource deteriorates, perpetuating a system in which poor communities are dependent on the wealthy.

Though development organizations may tout the importance of sustainability, few pay attention to how the resources they provide can be maintained. Regrettably, this means that even after spending billions of dollars building schools, water wells, and even providing toilets, the impact isn’t transformative.

The fact that resources are vulnerable to depreciation doesn’t mean they’re not a critical component of the economic development puzzle—it just means that in order for resources to be effective, development program managers must consider how communities can sustain them. This is where market-creating innovations have tremendous power and potential.

Market-creating innovations transform complicated and expensive products into simple and affordable ones, making them available to a larger segment of society.

One thing is for sure: most resources won’t last. Rather than simply provide a community with food, or take on ambitious infrastructure projects with little consideration of their maintenance, development organizations and governments should ask themselves how they can create a market that will generate enough revenues to fund these important initiatives. If they figure that out, they just might succeed in creating enduring prosperity for the billions trapped in poverty.

Read the full article about sustainable infrastructure by Efosa Ojomo at Christensen Institute.