Innovation for development

In the past few years, crowdfunding has become relevant as a facilitation tool for financing innovative projects as it allows people and organizations to invest directly in projects that they’re passionate about. This allows us to imagine that people would bet on and finance the most innovative projects.

However, an article published by the World Bank explains that in a study conducted with approx. 50,000 crowdfunding projects, the results were not as imagined. On the contrary, the study showed that those projects identified as innovative – defined as “useful and novel” – had a decrease in their funding opportunities. On the other hand, projects qualified only as “novel” experienced a 200% increase in funding, and the ones qualified as “useful” increased upon a 1200%.

The conclusions of the study show that despite the fact that the world is searching for innovative proposals for development issues, the results indicate that people choose to finance those projects they consider useful, despite the fact that the proposal itself is not innovative. The author of the article states that this is because the masses are not always able to identify and support projects that are novel and useful (and therefore innovative).

Instead, to identify these projects, the author proposes to take the specific sources of capital and investment, such as investors, as a starting point. It is a growing necessity in the developing world to consider the relevance of strengthening the investors networks to allow a greater interaction and synergies, increasing support to innovative projects.  For that,  online platforms are a good tool for strengthening this network.