Conference Presentation, Panel, Fireside Chat
Start-up Nations: Creating Laboratories for Developing Economies
Milken InstituteGlenn Yago, Clare Akamanzi, Jeremy Bentley, Richard Blum, Eli Groner, Angela Homsi, Karen Ross
- Global economic growth is projected to increasingly rely on aggregate demand from emerging and developing markets, requiring the activation of productivity in developing populations to fund long-term liabilities in developed nations, with outcomes determined by whether countries successfully leapfrog into climate-smart development or fall into middle-income traps.
- Demographic shifts toward 9 billion people by 2050 will necessitate 60% growth in food production, while younger populations in developing regions are expected to serve as either a demographic dividend or a geopolitical destabilizer depending on economic outcomes.
- Significant financing gaps persist, estimated at $5.7 trillion annually for climate change adaptation and $3 trillion for Sustainable Development Goals, though these are anticipated to be closed through cheaper capital sources, blended finance mechanisms, and increased productivity rather than solely through new funding.
- Strategic responses to these gaps include co-innovating bankable projects to address negative yield markets, leveraging $8 to $14 trillion in global fixed-income assets, and utilizing private-public partnerships to deploy capital in sectors like agriculture, which offers four times the poverty reduction effectiveness of other sectors.
- Specific regional initiatives focus on Israel exporting expertise in food, water, energy, and health to California and African nations, including the expansion of financial innovation labs in Jerusalem, the launch of a Masters of Development Practice program, and the Kigali Innovation City project in Rwanda designed to attract venture capital and reduce loan costs for entrepreneurs.
- Technological application plans involve Israel applying skills in cybersecurity, autonomous vehicles, and digital health to African nations, while US-China competition for influence is expected to intensify in Africa, Latin America, and Asia through the "Made in America" versus Chinese models.
- Institutional collaborations aim to scale technologies from lab to field through top-down contracting for cost reduction and bottom-up execution by local players to ensure country-fit solutions, exemplified by replicating Ignite Power's model in Rwanda and Citi's growth of its Israel-based accelerator which has assisted 200 companies in raising $275 million.
- Political and policy risks include a potential one-third reduction in the US foreign assistance budget by the current administration, which may drive a shift toward private sector and joint venture financing, while continued efforts are planned to maintain support through tax incentives, financial incentives, and specific programs like the American Himalayan Foundation's education initiatives.