A GEM with Big Ideas - 2014

Cambridge, MA—Harvard's Center for International Development (CID) hosted its seventh Global Empowerment Meeting earlier this fall. The event is CID's flagship annual event bringing together an invitation only list of select leaders and thinkers from development, government, business and philanthropy. Each year the group engages around the major development problems in the world today, and explore cutting-edge ideas to solve them.

It was an ambitious agenda, and it did not disappoint. Most conferences hinge on the quality of the crowd assembled, with the agenda often acting as scaffolding for networking. This was different. While GEM was certainly abundant in the quality of its attendees, what was also striking was the clarity and overall coherence of the agenda, panels, and speakers.

The speeches, presentations and discussions wove a compelling story about the world today, in particular the inequalities in livelihoods and social equality brought about by technology and digitization, and the globalization of problems without globalizing solutions. If there was a theme tying the different sessions together, it was inter-dependence: of the challenges we face, of the knowledge and skills we must develop, and of the new ethical, business, policy, and development models we need.

The tone was established with the conference opening at Loeb House on Wednesday evening by HKS Dean David Ellwood, followed by a keynote speech from the Prime Minister of Albania, Edi Rama (right). After paying tribute to the mentorship of Professor Ricardo Hausmann, and the impact of CID’s engagement with the government of Albania, the Prime Minister’s central message was that Albania will develop and thrive only if it connects to networks of knowledge, ideas, communication and business that his country had shunned for decades until its democratic transition.

Hailed by Professor Hausmann as an example of the type of leader we need today, Rama noted what he learned from Professor Hausmann, that for developing countries "it’s not what you have, but what you know," pointing to know-how as the key to growth. He insisted that Albania’s future is based on knowledge, which can only be achieved through integration in both Europe and the Balkans. He also had the memorable line – a quote from his grandmother: "A man can be anything as long as he is not boring."

After dinner, Michael Sandel, Professor of the most popular class in Harvard’s history—"Justice,"challenged his audience to explore the ethical limits of markets and the role money should take in achieving economic or social goals. He warned us not to let money dissolve the value of other kinds of things—such as reading a book. It is a timely message in an era when market mechanisms are able to achieve more and more.

The next day, GEM got going with a full schedule of panel sessions, presentations and keynotes. After a welcome from Marcela Escobari, CID’s Executive Director, GEM started quickly thanks to Professor Hausmann and The Atlas of Economic Complexity. His discussion centered upon the widening inequalities we observe today within and between countries and how they are attributable to gaps in Know-how—the ability to do things.

Technology, economists' favorite agent of growth, is creating winners and losers at a growing rate. But technology, Hausmann reminded us, is nothing more than the applied use of Know-how, which suggests that developing countries can catch up if they can figure out the right combinations of Know-how.

The next session highlighted how technology and digitization are making winners and losers out of businesses too. A diverse panel of innovators and HBS academics debated the forces and capabilities that determine which new ventures succeed, which incumbents fail, and which adapt. The latter are a rare breed that we can learn from—a case study of Havas showed that even one of the world’s foremost creative agencies can fall victim to inertia and habit. Meanwhile, enterprises like Local Motors, represented on the panel, are re-inventing whole production chains. How? In the words of its founder Jay Rogers, "by building a genuine digital platform to splice and share ideas."

Over lunch, the focus returned to inequality and the polarization of wealth. Canadian MP Chrystia Freeland examined the winners in today’s economy, noting that today 8% of national income goes to just 0.1% of the population. The rise of the super-rich was a trend picked up by Larry Summers. In his lunchtime keynote address, amid fears of deflation and gloomy forecasts for the current model of export-driven growth, he acknowledged that elites from opposite ends of the world have more in common with each other than with their neighbors, and that this gap is only going to widen. Summers' proposal was for plutocrats to lead responsibly.

But, before participants could become overwhelmed with the scale of global problems, the afternoon program turned to solutions. Professors Dan Levy and Richard Zeckhauser showed how certain models of group decision making can avoid the traps of mob-rule and leverage the wisdom of the crowd. Professors Asim Khwaja and Rohini Pande, who co-direct CID's Evidence for Policy Design program, made an impassioned and empirical case for the smart integration of data into policy design and implementation. Borrowing concepts from engineering, their cycle of diagnosis, design, execution and evaluation promises policy that is better aligned with the interests and behavior of those that benefit.

Harvard Business School Professor Arthur Segel led a session on Cities and how to make them work.  He began by showing a window into the future stating how, at our current rate of urbanization, we will need to build a city a week to house everyone. In preparation for this challenge, he engaged the plenary in an exercise where groups of participants had to design their own city. Prime Minister Rama then addressed the same cities session on the transformation he instigated while mayor of Tirana, and how beauty reinvigorated a declining backwater. He was joined on the panel by the former mayor of Essaouira (in Morocco), Asma Chaabi (right), who pioneered a new collaborative relationship with her city's inhabitants. Mitchell Weiss, former Chief of Staff for Mayor Menino of Boston, Massachusetts, talked about running the city of Boston during the aftermath of the bombing that took place at the finish line of the Boston Marathon in 2013; while Ellis Juan from the IDB spoke about how to make our cities sustainable.

Finally, the last session made the case for something essential if less glamourous: infrastructure, and the profound global inequality in this arena. Professor Lant Pritchett, who co-directs CID's Building State Capability program, explored the reasons why infrastructure needs in the developing world are disastrously unmet by the development and aid community, and ideas for how this might be addressed. The importance of this was underlined by Donald Kaberuka, President of the African Development Bank, for whom infrastructure is as much about saving lives as about building livelihoods. The message of the session, entitled "Dam if you do, damn if you don’t," seemed to be "you dam well have to."

After final closing remarks, GEM came to an end—giving way to a JFK Forum speech by Edi Rama. The conference provided a view of the future and the immense development challenges we will face: a new economy, its winners and losers, a workforce divided by Know-how and their relationship to technology, and uncontrollable rates of urbanization. The cases and models presented during the afternoon demonstrated solutions that have led to real impact. The conference gave us glimpses of the ideas, businesses and policies that will be effective in building tomorrow’s economy. To make our future one of shared growth and prosperity, there is still a lot of work to do.