Market Creating Innovations: A Path To Tackling Unemployment

-

 

Since market creating innovations serve a large number of people and such innovations propel the ecosystem to produce many other products and services, it is of vital importance for public policy strategy seeking to address the rising unemployment problem to consider making objective investments into market creating innovations.




When population increases exponentially yet job creation happens only marginally, unemployment will remain growing and further burdening affected families, severally, and society, collectively.

Public policy efforts to tackle unemployment by increasing government spending also risk plunging the affected economy into inflation triggered by more money in circulation.

Also trying to fix the unemployment problem through Foreign Direct Investment does, to some degree, jeopardize state interests because some of the foreign direct investments require that the country forgo certain interests, either socioeconomic, cultural or political in a bid to favor targeted investors.

What remains the best value-creating approach to tackle unemployment and challenges therefrom is entrepreneurship. Entrepreneurship helps society organize resources to produce goods and services of value to society.

Since entrepreneurship employs both human and non-human capital to produce goods and services needed by society, it happens, by default, for entrepreneurs to find novel ways of deploying resources to generate the intended and predetermined value for target consumers.

In their entrepreneurial pursuits, entrepreneurs are inclined to minimize costs of production and losses with a chief aim of increasing returns on investment.

The result of inclination to profit maximization through reduction of costs of production and losses is the prevalence of creative mechanisms for producing goods and services.

Such creative and novel mechanisms for production and rendering of goods and services is what is referred to as innovation. Innovations create value by creating solutions to specific problems faced by a given segment of the population.

Some innovations; however, create a completely new segment of consumers by turning already existing but expensive inaccessible and complex products into affordable accessible and easy-to-use (simple) products for consumers who needed them all along but could not afford them given their prices and cost-to-access. These innovations are what is called Market Creating Innovations.

A historically visible example of Market Creating Innovations is the development of the Model T car by American entrepreneur- Henry Ford. Before developing the Model T, cars were a luxury of the wealthy minority of the country’s population. What Ford did was build a car that was easy to use, affordable and accessible to a majority of the American population who, formerly, could not afford to buy cars.

Given the fact that the segment of the population served by Market Creating Innovations comprises of the largest number of people, market creating innovations produce large scale opportunities for society as a large portion of the available labor force is deployed to serve in building the necessary infrastructure to enable production of products, serving within the new market segments (those created through market creating innovations) and other businesses formed as forward and, or backward linkages to the newly formed markets.

From this, new job opportunities emerge as the business formed hires labor to help execute on production, distribution and all other duties within the business. Equally, new businesses resulting, as forward and backward linkages, from the market creating innovations employ people to address consumption set off by the innovation.

Since market creating innovations serve a large number of people and such innovations propel the ecosystem to produce many other products and services, it is of vital importance for public policy strategy seeking to address the rising unemployment problem to consider making objective investments into market creating innovations.

The essence of state-led investment into market creating innovations is to speed up the emergence of businesses which address problems faced by the majority of the country’s population- who are, in most cases, the least income earners- and, for that reason, create numerous job opportunities, improve people’s lives by bringing, within their reach, products and services which help them better their household incomes either by relying on such innovations or any other such developments existing as a culmination of market creating innovations, thus causing substantial ripple effects within the economy.



By Steven Caleb Katurebe

e-mail: stevencaleb680@gmail.com


Comments

Post a Comment

Popular posts from this blog

Dear Government, Do Not Give Up Your Ability to Persuade

-
Image
  The public is not concerned about the idea of better pensions. When faced with public outrage over a decision, governments often find themselves at a crossroads: i. Stick to the decision and try to convince people why it is necessary, hoping logic and goodwill prevail; or ii. Listen to public concerns and consider adjusting the plan, even if it means walking it back. The recent announcement to double pension contributions from 6% to 12% starting January 2025 and to gradually increase them to 20% by 2030 has lit a fire of public debate. The Ministries of Finance, Public Service and Labour, along with the Rwanda Social Security Board (RSSB), did step forward to explain the reasoning behind this move. They highlighted some quite solid goals: increasing pension payouts for retirees whose life expectancy has increased, providing capital to Micro Small and Medium Enterprises in the private sector, and boosting research and innovation funding. The leaders even did compare regional pensi...
Read more

How Lack Of Clarity Of Identity Is Keeping The DRC In a State Of Woe

-
Image
While Rwanda has been able to rebuild a unifying identity for all Rwandans, DR Congo, to date, remains unable to build a unifying identity for all communities on Congolese soil. The DRC has failed to determine whether Congolese Kinyarwanda-speaking Tutsi communities, put under the DRC during colonial demarcations of African borders, are legitimate Congolese with rightful claims to political rights and protections. Only societies which have achieved a clear and unified understanding of the identities of their separate units (communities) and how such identities tie the various communities close together and to the collective national identity, under which they exist, are able to chart and maintain a development path. Part of what continues to hold DRC back from its development potential is a confusion on national identity- beyond country name- which, in and by itself, is born of the failure of the Congolese society to have a clear sociopolitical identity. To understand this, take Rwanda...
Read more

In Understanding the DRC Security Crisis, Distance is a Factor

-
Image
DR Congo President Félix-Antoine Tshisekedi meets former Kenyan President Uhuru Kenyatta, who is the facilitator of the East African Community-led peace process and EAC Secretary General Peter Mathuki in Kinshasa on November 13. Courtesy The re-emergence of the M23 group in eastern Democratic Republic of Congo after a decade of inaction has, once more, raised heated debate about Congo’s security fiasco in the region. Many analysts and political commentators seem to believe and advance Kinshasa’s main line of argument which is that Rwanda, mainly, and Uganda, to some extent, are directly involved in destabilizing the Congo’s eastern region in an attempt to steal the country’s mineral resources. Believing this narrative stems from a point of total ignorance of or limited knowledge about the dynamics of the affairs of the Democratic Republic of Congo and their historical underpinnings. Ignorance of historical factors contributing to the current state of things in the Congo and the region ...
Read more