How diasporas are boosting global development

Lidya Teferra teaches at Urael primary school in Addis Ababa, Ethiopia. Photo by: IdEA

By Romi Bhatia, senior advisor for diaspora partnerships in the U.S. Agency for International Development’s Global Partnerships Division

On April 30, the World Wide Web turned 20 years old. In 1993, 133 million personal computers were sold in the developed world. Today, despite sales of over 300 million PCs, smart phones and tablets are out pacing personal computers. We are living in an unprecedented era of human mobility and rapid innovation.

What does this have to do with diasporas? Worldwide, 215 million first-generation migrants are living in countries other than their country of origin and an estimated $534 billion in recorded remittances were sent worldwide in 2012. Diasporas are defined as a community of people who live outside their shared country of origin or ancestry, but maintain active connections with it. They include both emigrants and their descendants. And in the United States, diasporans or immigrants are leading many of the changes we are seeing in the technology industry. While foreign-born immigrants represent only an eighth of America’s population, they sit atop a quarter of high-tech startups, according to a recent article in The Economist magazine.

These startups have led to high-tech jobs that have a “multiplier” effect, leading to additional job creation in the manufacturing and service industries. Diasporans are also using their capital, intellectual expertise and business acumen to start enterprises in their countries of origin. In turn, these businesses are fostering innovation and enhancing competitiveness in the local economy by introducing new technology, products and business processes.

Policymakers, development practitioners and private sector companies alike are recognizing not only the economic prowess of diaspora communities but also their role as important stakeholders and potentially powerful actors in international affairs and foreign assistance. In the United States alone, diaspora communities had cumulative savings of over $400 billion in 2010, according to the World Bank. This important flow of people and financial resources represents a real opportunity for the U.S. government through the U.S. Department of State and the U.S. Agency for International Development to harness the entrepreneurial drive of diaspora communities.

Take, for example, entrepreneur Jose Alejandro “Bati” Flores, the son of U.S. and Guatemalan parents who founded the VOS Flips brand in 2008. VOS Flips is a sandals company that promotes social development and increased environmental awareness. It donates a pair of sandals to people in developing countries for every pair sold. It also provides basic health care and education to communities on plantations where raw material for the sandals is cultivated and uses recycled materials to make its sandals. Flores, with his multicultural background and international mindset, is an example of the potential human and financial capital that diasporans possess to become changemakers both in their country of residence and origin.

Or consider Sproxil Inc., a technology company ranked number seven on Fast Company’s list of most innovative businesses in 2013. Sproxil is a diaspora-driven company that is having a significant, positive impact in Nigeria, Kenya and India. The company was founded in 2009 by Ashifi Gogo, a Ghanaian-American educated in the United States who returned to Nigeria to launch a business to address the high incidence of counterfeit drugs. Sproxil utilizes a coding system and SMS technology to enable consumers to verify the authenticity of prescriptions at the point of sale with their mobile phones. Sproxil’s technology helps drug manufacturers view and analyze real-time consumer data to detect and prevent drug counterfeiting in developing countries. Sproxil was one of 14 winners in the African Diaspora Marketplace, a flagship business plan competition launched in 2009 as a public-private partnership by USAID and the Western Union.

Skeptics might question the role of a donor agency such as USAID in providing support to startups — something that typically happens in Silicon Valley, not in Washington, D.C. But a paradigm shift has been occurring in the development field. In May 2011, former Secretary of State Hillary Clinton and USAID Administrator Dr. Rajiv Shah co-convened the inaugural Global Diaspora Forum and launched the International diaspora Engagement Alliance.

IdEA is a collaboration between the State Department, USAID and a multitude of private actors that seeks to harness the global connections of diaspora communities to strengthen diplomacy and development outcomes in their countries of origin or heritage. The three main goals of IdEA are to expand entrepreneurship and investment, advance science and technology collaborations, and give back through philanthropy and volunteerism. IdEA has become a unique platform for diaspora communities to seek collaborations with each other, share their perspectives on issues related to foreign affairs and development cooperation, and explore ways to collaborate with public and private partners.

In response to the growing calls for diaspora dialogue and engagement worldwide, this week’s third annual Global Diaspora Forum will embark on an unprecedented endeavor by expanding from a Washington-based event to a multi-city engagement across continents, with events occurring in Los Angeles, Silicon Valley, Dublin, Ireland, and the U.S. capital.  Under the theme of “Where Ideas Meet Action,” GDF 2013 will convene leaders in business, technology, investment and trade, government and other prominent members of global diaspora communities as they explore new ways of collaborating on innovative, technology-driven and youth-focused initiatives.

At USAID, public-private partnerships are a critical way we are doing business differently. We want to leverage resources, expertise and technology to maximize our impact and deliver results that are sustainable long after public funding ends. Diaspora groups are one of the new partners that USAID is engaging as they often possess the social connections, cultural and linguistic competence, and the willingness and resiliency to invest in markets that traditional investors view as risky. We encourage diaspora groups to join the IdEA platform and explore ways to partner with us.

Learn more about this week’s third annual Global Diaspora Forum and how to become a member of the International diaspora Engagement Alliance. Inquiries about partnering with USAID can be directed to robhatia@usaid.gov.

Romi Bhatia is a senior advisor for diaspora partnerships in the Global Partnerships Division at the U.S. Agency for International Development. He is part of the core team that is helping to drive the agency’s engagement with diaspora communities in the United States in order to achieve the agency’s global development objectives.

About the author

  • Devexlogo d 226

    Devex Editor

    Thanks a lot for your interest in Devex News. To share news and views, story ideas and press releases, please email news@devex.com. We look forward to hearing from you.