One of the biggest tragedies of global poverty is how hard it is to transition out of it. Rather, the international policy on how to handle poverty makes the transition difficult. The secret sauce to eliminating poverty is to empower the under-served to build wealth of their own.
The key is not to just give people fish, but rather to teach them how to fish. That is what we believe at Tricord Global and why we provide micro-loans as opposed to donations. Don’t get me wrong here, donations have a place in emergency and dire situations. Long term, though, it doesn’t grow an economy. For effective economic growth, you have to provide the correct motivation and incentive.
How to Motivate & Incentivize Economic Growth
The Push – Pull Theory
The word incentive means to kindle, ignite, or set the tune. It is used to encourage, stimulate or rouse to action. In business, it is a system of rewards meant to encourage harder work, and foster loyalty. Incentive pulls in a direction based on external stimuli.
It only becomes effective if it connects to true motivation. Motivation pushes in a direction based on internal stimuli/tension. Motivation is based on people’s motives, needs, wants, or interests. In other words, motivation is attached to what people value internally and the priorities they have set to get somewhere or obtain something. Motivation is what truly drives them.
Incentives, as they relate to Tricord Global and the disenfranchised areas we work in, are usually strongly connected to motivation. People are motivated to do well in their business because they want to be able to pay for their kids to go to school.
While giving money, as an incentive is a good thing, it doesn’t necessarily mean it is an effective thing. Money is a medium of exchange, which we use to purchase what we truly desire. People go to work not because they are motivated by the money, but rather they are motivated to have a place to live, food to eat, car to drive, education for their children, toys, hobbies, a secure future, and the list goes on. That is why people are continually leaving higher paying jobs for jobs that offer more and different opportunities that harmonize with their internal values. Money alone has a short shelf life as an incentive if it does not connect to motivation.
In developing nations, money does mean a lot. However, money is easy to blow through, and eventually you will be out. That is why we empower entrepreneurs who open their own businesses. Their motivation is to be able to live comfortably with their families, and we provide the means to get there. We don’t give them money, we give them opportunity.
Four Primary Motivators
Over the last several years, the research consistently shows four things, which are primary motivators for all human work product. Those primary motivators are:
Autonomy – control over one’s actions
Creativity – the ability to bring one’s own ideas to the activity
Value – the belief that the activity is important or fulfills a personal value
Growth – the improving of a professional skill set
By empowering entrepreneurs in developing nations, we give them access to all four of those motivators.
I hope this post has given you some context and revelations regarding economic work in developing nations.
If this article really touched you, Tricord Global will be opening up investments for a limited time in just two days. Comment on this blog or contact our office at (720) 989-0222 if you’re interested!