Innovation is the antidote to corruption
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0:01 - 0:03So in 2011,
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0:03 - 0:05someone broke into my sister's office
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0:05 - 0:08at the university
where she teaches in Nigeria. -
0:08 - 0:13Now thankfully, the person was caught,
arrested and charged to court. -
0:13 - 0:15When I get into court,
-
0:15 - 0:18the clerks who were assigned
to my sister's case informed her -
0:18 - 0:21that they wouldn't be able
to process the paperwork -
0:21 - 0:22unless she paid a bribe.
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0:23 - 0:26Now, at first she thought
it was part of a practical joke. -
0:26 - 0:29But then she realized they were serious.
-
0:29 - 0:31And then she became furious.
-
0:31 - 0:36I mean, think about it: here she was,
the recent victim of a crime, -
0:36 - 0:39with the very people
who were supposed to help her, -
0:39 - 0:41and they were demanding a bribe from her.
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0:42 - 0:44That's just one of the many ways
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0:44 - 0:48that corruption impacts
millions of people in my country. -
0:48 - 0:50You know, growing up in Nigeria,
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0:50 - 0:54corruption permeated
virtually every element of the society. -
0:54 - 0:59Reports of politicians embezzling
millions of dollars were common. -
0:59 - 1:02Police officers stealing money
-
1:02 - 1:06or extorting money
from everyday hardworking citizens -
1:06 - 1:07was routine practice.
-
1:08 - 1:12I felt that development
could never actually happen, -
1:12 - 1:14so long as corruption persisted.
-
1:15 - 1:17But over the past several years,
-
1:17 - 1:20in my research on
innovation and prosperity, -
1:20 - 1:25I've learned that corruption is actually
not the problem hindering our development. -
1:26 - 1:27In fact,
-
1:27 - 1:31conventional thinking on corruption
and its relationship to development -
1:31 - 1:36is not only wrong, but it's holding
many poor countries backwards. -
1:37 - 1:39So, the thinking goes like this:
-
1:39 - 1:41in a society that's poor and corrupt,
-
1:41 - 1:45our best shot at reducing corruption
is to create good laws, -
1:45 - 1:47enforce them well,
-
1:47 - 1:51and this will make way for development
and innovation to flourish. -
1:52 - 1:53Now, it makes sense on paper,
-
1:53 - 1:56which is why many governments
and development organizations -
1:56 - 1:59invest billions of dollars annually
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1:59 - 2:03on institutional reform
and anti-corruption programs. -
2:03 - 2:07But many of these programs
fail to reduce corruption, -
2:07 - 2:09because we have the equation backwards.
-
2:10 - 2:14You see, societies don't develop
because they've reduced corruption. -
2:15 - 2:19They're able to reduce corruption
because they've developed. -
2:20 - 2:24And societies develop
through investments in innovation. -
2:25 - 2:27Now, at first, I thought
this was impossible. -
2:27 - 2:29Why would anyone in their right mind
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2:29 - 2:33invest in a society where,
at least on the surface, -
2:33 - 2:35it seems a terrible place to do business?
-
2:35 - 2:38You know, a society where
politicians are corrupt -
2:38 - 2:40and consumers are poor?
-
2:40 - 2:42But then, the more I learned about
-
2:42 - 2:46the relationship
between innovation and corruption, -
2:46 - 2:48the more I started
to see things differently. -
2:49 - 2:52Here's how this played out
in sub-Saharan Africa -
2:52 - 2:55as the region developed
its telecommunications industry. -
2:56 - 2:58In the late 1990s,
-
2:58 - 3:02fewer than five percent of people
in sub-Saharan Africa had phones. -
3:02 - 3:07In Nigeria, for example, the country
had more than 110 million people -
3:07 - 3:10but fewer than half a million phones
in the whole nation. -
3:10 - 3:14Now, this scarcity fueled
widespread corruption in the industry. -
3:15 - 3:18I mean, public officials who worked
for the state-owned phone companies -
3:18 - 3:20demanded bribes from people
who wanted phones. -
3:21 - 3:24And because most people
couldn't afford to pay the bribes, -
3:24 - 3:26phones were only available
to those who were wealthy. -
3:27 - 3:30Then an entrepreneur named Mo Ibrahim
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3:30 - 3:33decided that he would set up
a telecommunications company -
3:33 - 3:34on the continent.
-
3:35 - 3:39Now, when he told his colleagues
about his idea, they just laughed at him. -
3:39 - 3:41But Mo Ibrahim was undeterred.
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3:41 - 3:44And so in 1998, he set up Celtel.
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3:45 - 3:48The company provided affordable
mobile phones and cell service -
3:49 - 3:50to millions of Africans,
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3:50 - 3:54in some of the poorest and most corrupt
countries in the region -- -
3:54 - 3:57I mean countries such as Congo, Malawi,
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3:57 - 3:59Sierra Leone and Uganda.
-
4:00 - 4:04You see, in our research,
we call what Mo Ibrahim built -
4:04 - 4:06a "market-creating innovation."
-
4:07 - 4:12Market-creating innovations transform
complicated and expensive products -
4:12 - 4:14into products that
are simple and affordable, -
4:14 - 4:18so that many more people in society
could access them. -
4:19 - 4:21Now in this case, phones were expensive
-
4:21 - 4:24before Celtel made them
much more affordable. -
4:25 - 4:28As other investors --
some of his colleagues, actually -- -
4:28 - 4:32saw that it was possible to create
a successful mobile phone company -
4:32 - 4:33on the continent,
-
4:33 - 4:36they flooded in with billions
of dollars of investments. -
4:36 - 4:39And this led to significant
growth in the industry. -
4:40 - 4:43From barely nothing in 2000,
-
4:43 - 4:45today, virtually every
African country now has -
4:45 - 4:48a vibrant mobile
telecommunications industry. -
4:49 - 4:53The sector now supports
close to one billion phone connections, -
4:53 - 4:56it has created nearly four million jobs
-
4:56 - 5:01and generates billions of dollars
in taxes every year. -
5:01 - 5:05These are taxes that governments
can now reinvest into the economy -
5:05 - 5:07to build their institutions.
-
5:08 - 5:10And here's the thing:
-
5:10 - 5:13because most people no longer
have to bribe public officials -
5:13 - 5:14just to get a phone,
-
5:14 - 5:19corruption -- at least within
this industry -- has reduced. -
5:20 - 5:24Now, if Mo Ibrahim had waited
for corruption to be fixed -
5:24 - 5:27in all of sub-Saharan Africa
before he invested, -
5:27 - 5:29he would still be waiting today.
-
5:30 - 5:34You know, most people who engage
in corruption know they shouldn't. -
5:35 - 5:38I mean, the public officials
who were demanding bribes from people -
5:39 - 5:40to get phones
-
5:40 - 5:42and the people
who were paying the bribes -- -
5:42 - 5:44they knew they were breaking the law.
-
5:44 - 5:45But they did it anyways.
-
5:46 - 5:47The question is: Why?
-
5:48 - 5:49The answer?
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5:49 - 5:51Scarcity.
-
5:52 - 5:55See, whenever people would benefit
from gaining access -
5:55 - 5:56to something that scarce,
-
5:56 - 5:59this makes corruption attractive.
-
6:00 - 6:04You know, in poor countries, we complain
a lot about corrupt politicians -
6:04 - 6:05who embezzle state funds.
-
6:05 - 6:09But in many of those countries,
economic opportunity is scarce, -
6:09 - 6:13and so corruption becomes
an attractive way to gain wealth. -
6:14 - 6:17We also complain about
civil servants like police officers, -
6:17 - 6:21who extort money from everyday
hardworking citizens. -
6:22 - 6:25But most civil servants
are grossly underpaid -
6:25 - 6:27and are leading desperate lives.
-
6:27 - 6:33And so for them, extortion or corruption
is a good way to make a living. -
6:34 - 6:38You know, this phenomenon also plays
itself out in wealthy countries as well. -
6:40 - 6:43When rich parents
bribe university officials -- -
6:43 - 6:47(Laughter)
-
6:47 - 6:50When rich parents
bribe university officials -
6:50 - 6:55so their children can gain admission
into elite colleges, -
6:55 - 6:57the circumstance is different,
-
6:57 - 6:59but the principle is the same.
-
6:59 - 7:02I mean, admission
into elite colleges is scarce, -
7:02 - 7:05and so bribery becomes attractive.
-
7:08 - 7:09The thing is,
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7:09 - 7:13I'm not trying to say there shouldn't
be things that are scarce in society -
7:13 - 7:15or things that are selective.
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7:15 - 7:17What I'm just trying to explain
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7:17 - 7:21is this relationship
between corruption and scarcity. -
7:21 - 7:26And in most poor countries,
way too many basic things are scarce. -
7:26 - 7:28I mean things like food,
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7:28 - 7:29education,
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7:29 - 7:31health care,
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7:31 - 7:32economic opportunity,
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7:32 - 7:34jobs.
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7:35 - 7:39This creates the perfect breeding ground
for corruption to thrive. -
7:40 - 7:43Now, in no way does this
excuse corrupt behavior. -
7:43 - 7:46It just helps us
understand it a bit better. -
7:47 - 7:50Investing in businesses
that make things affordable -
7:51 - 7:53and accessible to so many more people
-
7:53 - 7:55attacks this scarcity
-
7:55 - 7:59and creates the revenues for governments
to reinvest in their economies. -
8:00 - 8:03Now, when this happens
on a countrywide level, -
8:03 - 8:05it can revolutionize nations.
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8:06 - 8:09Consider the impact in South Korea.
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8:10 - 8:11Now, in the 1950s,
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8:11 - 8:15South Korea was
a desperately poor country, -
8:15 - 8:17and it was very corrupt.
-
8:18 - 8:21The country was ruled
by an authoritarian government -
8:21 - 8:23and engaged in bribery and embezzlement.
-
8:24 - 8:30In fact, economists at the time
said South Korea was trapped in poverty, -
8:30 - 8:33and they referred to it
as "an economic basket case." -
8:34 - 8:36When you looked
at South Korea's institutions, -
8:36 - 8:38even as late as the 1980s,
-
8:38 - 8:42they were on par with some of the poorest
and most corrupt African countries -
8:42 - 8:43at the time.
-
8:44 - 8:49But as companies like
Samsung, Kia, Hyundai -
8:49 - 8:52invested in innovations
that made things much more affordable -
8:52 - 8:55for so many more people,
-
8:55 - 8:57South Korea ultimately became prosperous.
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8:58 - 9:01As the country grew prosperous,
-
9:01 - 9:04it was able to transition
from an authoritarian government -
9:04 - 9:06to a democratic government
-
9:06 - 9:10and has been able to reinvest
in building its institutions. -
9:10 - 9:13And this has paid off tremendously.
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9:14 - 9:16For instance, in 2018,
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9:16 - 9:20South Korea's president
was sentenced to 25 years in prison -
9:20 - 9:22on corruption-related charges.
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9:22 - 9:26This could never have happened decades ago
when the country was poor -
9:26 - 9:29and ruled by an authoritarian government.
-
9:30 - 9:35In fact, as we looked at most prosperous
countries today, what we found was, -
9:35 - 9:39they were able to reduce corruption
as they became prosperous -- -
9:39 - 9:41not before.
-
9:42 - 9:44And so where does that leave us?
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9:45 - 9:49I know it may sound like I'm saying
we should just ignore corruption. -
9:49 - 9:51That's not what I'm saying at all.
-
9:52 - 9:53What I'm suggesting, though,
-
9:53 - 9:58is that corruption, especially
for most people in poor countries, -
9:58 - 9:59is a work-around.
-
10:00 - 10:01It's a utility
-
10:01 - 10:05in a place where there are fewer
better options to solve a problem. -
10:06 - 10:09Investing in innovations that make
products much more affordable -
10:09 - 10:11for many people
-
10:11 - 10:13not only attacks this scarcity
-
10:13 - 10:16but it creates a sustainable
source of revenue -
10:16 - 10:19for governments to reinvest
into the economies -
10:19 - 10:22to strengthen their institutions.
-
10:22 - 10:26This is the critical missing piece
in the economic development puzzle -
10:26 - 10:30that will ultimately
help us reduce corruption. -
10:31 - 10:34You know, I lost hope
in Nigeria when I was 16. -
10:34 - 10:37And in some ways, the country
has actually gotten worse. -
10:38 - 10:42In addition to widespread poverty
and endemic corruption, -
10:42 - 10:45Nigeria now actually deals
with terrorist organizations -
10:45 - 10:47like Boko Haram.
-
10:48 - 10:51But somehow, I am more hopeful
about Nigeria today -
10:51 - 10:53than I have ever been before.
-
10:53 - 10:57When I see organizations
investing in innovations -
10:57 - 11:00that are creating jobs for people
-
11:00 - 11:02and making things affordable --
-
11:02 - 11:05I mean organizations
like Lifestores Pharmacy, -
11:05 - 11:09making drugs and pharmaceuticals
more affordable for people; -
11:09 - 11:11or Metro Africa Xpress,
-
11:11 - 11:16tackling the scarcity of distribution
and logistics for many small businesses; -
11:16 - 11:22or Andela, creating economic opportunity
for software developers -- -
11:22 - 11:24I am optimistic about the future.
-
11:24 - 11:26I hope you will be, too.
-
11:26 - 11:27Thank you.
-
11:27 - 11:32(Applause)
- Title:
- Innovation is the antidote to corruption
- Speaker:
- Efosa Ojomo
- Description:
-
Traditional thinking on corruption goes like this: if you put good laws in place and enforce them well, then economic development increases and corruption falls. In reality, we have the equation backwards, says innovation researcher Efosa Ojomo. In this compelling talk, he offers new thinking on how we could potentially eliminate corruption worldwide by focusing on one thing: scarcity. "Societies don't develop because they've reduced corruption," he says. "They're able to reduce corruption because they've developed."
- Video Language:
- English
- Team:
- closed TED
- Project:
- TEDTalks
- Duration:
- 11:45
Oliver Friedman edited English subtitles for Reducing corruption takes a specific kind of investment | ||
Brian Greene approved English subtitles for Reducing corruption takes a specific kind of investment | ||
Brian Greene edited English subtitles for Reducing corruption takes a specific kind of investment | ||
Camille Martínez accepted English subtitles for Reducing corruption takes a specific kind of investment | ||
Camille Martínez edited English subtitles for Reducing corruption takes a specific kind of investment | ||
Camille Martínez edited English subtitles for Reducing corruption takes a specific kind of investment | ||
Joseph Geni edited English subtitles for Reducing corruption takes a specific kind of investment | ||
Joseph Geni edited English subtitles for Reducing corruption takes a specific kind of investment |