Kiva as a Test of Our “Societal Creativity” Innovations Case Discussion: Kiva.org

Abstract

The accomplishments of the team of founders at Kiva are impressive on many levels. Their use of technology to connect Westerners who have money with people in the developing world who need small loans to start businesses achieves both economic and social benefits. It creates a form of valuable exchange that could not easily have occurred before widespread use of the Internet. Unlike many other platforms of exchange, Kiva adds to the world's overall wellbeing in a way that conveys major benefits to a group that often misses out on the biggest advantages of economic interaction: those who (as economists might put it) lack significant initial wealth endowments. Getting this special kind of value creation going required that Matt Flannery, his wife Jessica, and other early members of the team at Kiva surmount major challenges. As impressive and interesting as their story is, though, Kiva's significance as a test of our own societal capabilities might be even more important.Kiva's founders were tested in the sense that entrepreneurs usually are. They had to get things to work that never had before, to build technology, systems, and relationships that would enable beneficial interactions. But what emerges most clearly from this story is that it also presents a test of our societal institutions, organizations, individual and group inclinations, and much more. If Kiva represents a new form of exchange that creates value, if all parties involved in it wish to participate in that exchange, if this activity harms no one in any obvious way, and yet the inertia of existing ways of doing things fails to permit that, then who has really failed a test? Framed this way, the social welfare stakes seem very high.As we move more deeply into the 21 st century, the measure of our institutions may be how effectively they can adapt to new forms of value creation, especially technology-enabled forms that produce social returns in addition to strictly financial ones. This test may prove important commercially and competitively, as developed economies come to rely more on innovation to create economic value. One