Stephanie,
Thanks for bringing up this discussion topic.
You made a great point about the value of a self-sustaining market-based approach in generating impact.
From our perspective at Speak Shop, capitalism can be one of the most powerful forces for positive change. People are intrinsically motivated when their actions and hard work deliver positive results. But when hard work is not adequately rewarded or even when the value of the work is subsidized by well-meaning charity, the return on investment decreases. And often, low-income people lack the power to change their circumstances. It could be that they can't move to a more modern area, or they have a limited customer demand, or they can't fight against unfair working conditions and pay.
Low-income people constantly face geographic, political and economic barriers that prevent them from seeing an adequate return (eg, sustainable living, health for their families) on their own investments (eg, hard work, education, etc.).
We believe that Internet technology is creating these opportunities on a massive scale because it can connect buyers and sellers around the world - it brings new entrepreneurial opportunities to people in underdeveloped locations. It can also be scalable and low-cost - providing a great formula for high returns on investment. Coupled with the right human resources, the Internet is a revolutionary tool against poverty and its related ills.
Luzette raised the issue that low-income people often do not have the opportunity to develop their educational levels, and that prevents them from progressing. That is absolutely very important - education.
But what I want to point out is that what is happening all over the world today is that even educated people with bona-fide marketable skills, such as experienced Spanish language tutors in Guatemala, do not have the opportunity to achieve financial stability no matter how hard they work. Despite having something great to sell, they are impoverished. This is because no matter how hard they work, they are not able to access more customers and to control their own wages. The Internet can correct this. It can eliminate many layers of middlemen, giving financial control to the low-income seller. It is also a massive source of customers.
All of this is not to say that the Internet is the solution to every problem or feasible everywhere. Even if it is the right solution for a certain group of people, you also need to provide the right support to bring low-income people online and enable them to participate in the global market. The Internet coupled with market opportunities truly can bring millions of people out of poverty if used correctly. The point is that it is one area that investors should continue to invest in.
-Cindy
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