Will Entrepreneurs Save the World?

There's a big discussion going on about the role of government and capitalism in addressing social ills like poverty and disease, and it's a discussion where I think entrepreneurs, even small-time ones, can play a critical role. Creative Capitalism is a blog where some brilliant minds are talking about Bill Gates's argument, made at the World Economic Forum in Davos, Switzerland, that philanthropy alone can't solve the world's problems. Free-market capitalism is also required. Many of the responses are hopeful and optimistic about capitalists' role in promoting social good, but we also hear skepticism from former Secretary of Labor Robert Reich, who writes of a "false hope in the private sector."

This reminds me of an interview I did with John Kao last year about his book Innovation Nation. He made a number of interesting points about how America is losing its status as leader in producing innovative technologies. But what surprised me was how much he measured America's commitment to innovate based on how much the federal government is doing, ignoring the private sector.

That's why I found this entry in the discussion by Abhijit Banerjee, an economist at MIT, so interesting. He explains how when it comes to finding innovative solutions to social ills, the social sector—nonprofit organizations, NGOs, etc.—have the on-the-ground, local knowledge that government lacks. But this sector can't fund itself. For that, it needs finance from entrepreneurs who can identify where their money can do the most good.

The remarkable thing about governments is how little they have changed organizationally over the last one hundred years despite the amazing progress we have seen in technology and the substantial, though less remarkable, progress made by the social sciences.

Definitely read Banerjee's example of how the World Health Organization's protocol for dealing with tuberculosis was completely outmoded and how a group of researchers at MIT's Jameel Poverty Action Lab—funded by entrepreneur Mohammed Jameel—found a better way to keep TB patients on schedule with their medication.

So entrepreneurs of the world, be fruitful and multiply your profits—but also give them out to the organizations you find worthy. The solutions for countless social problems can be found in that money. Don't wait for governments to take care of things for you.