Monday, June 15, 2009

Social Capital Economics

Even in a Flat World, face-to-face interaction is still king. But that's a huge problem when business is global. Many African nations have learned that lesson the hard way:

"You can't out-local a local" said Alemayehu, who emphasizes that there is no substitute for finding local talent. He is tired of seeing technology companies try to run their operations from afar when there is a skilled labor pool waiting for them. Pohl weighed in that global ideas are needed but it takes a local presence to translate them properly.

Second, the panelists agreed that supporting locally-developed innovation is vital to their work. How do you do that? Alemayehu's answer is money and mentoring. He called for the Diaspora of these countries to contribute funds to get ideas moving. Camara is trying to find the superstars and support their work. If you have limited funds to finance SMEs, he says you've got to fund the innovators in their field.

Samuel Alemayehu is an advisor for ZebraJobs, an agency that links diaspora talent with African jobs. There's a recent National Public Radio interview with the founder, Yusuf Reja, of ZebraJobs if you would like to learn more. The innovation is understanding that "locals" might live all around the world. This is a business network that can work around what I call the "proximity problem" or "proximity rule".

To urbanists, the proximity rule is a good thing. This forces people to live in high-density environments where the exchange of knowledge is most efficient. I think of the proximity problem as something to overcome because this human need limits the geographic scope of markets and innovation. One great exception to the proximity rule is diaspora networking. Along these relationship lines can travel local knowledge. A good example is the Indian Diaspora. Likewise, could be the Greater Youngstown Diaspora.

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