This transcript was generated by AI and may contain typos and inaccuracies.

Amie: Welcome to high impact growth, a podcast from Dimagi about the role of technology and creating a world where everyone has access to the services they need to thrive. I’m Amy Vaccaro, senior director of marketing at Dimagi. And your co-host along with Jonathan Jackson, Dimagi CEO. And co-founder. Today at Jonathan and I have the pleasure of interviewing Raj Kumar.

The founder and editor in chief of dev X, which is the premier news outlet for all things happening in global health and development. The conversation starts. With Roger’s take on how 2023 will usher in a new era for development. Given converging political, economic, and humanitarian factors. And it evolves to a discussion of how we might shift the mindset and development.

From a project based mentality that’s producing such limited results to more of an investment mindset. Given all that is going wrong in the world. Right now. I expected this to be a depressing conversation. But I came out of it feeling hopeful.

And I think you’ll find there some clear takeaways. For everyone in the audience. I hope you enjoy.

Amie: Raj, thank you so much for joining us. Welcome to the High Impact Growth Podcast. so I’ve been reading Devex since I joined dgi, which is about two years ago, and it’s been so instrumental for me in just helping me understand the lay of the land and what’s going on in the industry and actually make every new hire on my team, , subscribe and, and read it daily.

, I know you’ve also written a book called The Business of Changing the World. You’ve also got a number of podcasts yourself. , including the Devex book Club, which you just launched, which I’m excited about, and we’ll share a link to in the show notes. , but I’d love to kind of hear a little bit about your story , , you know, before we get into nitty gritty of what’s happening in the aid world.

Raj: Yeah, sounds great and great to be with you, Amy and John. It’s, it’s really nice to have this conversation. Um, yeah. You know the dev story. It’s actually like an overnight success story that took 23 years. So, you know, a lot of people, devex kind of came onto their radar more recently and, uh, and they’re like, oh, wow, you, you guys must be a startup.

How did you do this so fast? And I was like, no, actually this took a really long time. Uh, I started it as a grad student. Uh, this was a student project 23 years ago. I was in, in grad school at Harvard’s Government School, the Kennedy School, and, uh, myself and some friends. And we were, you know, really thinking about how can you change the way the development sector works?

And the way I kind of even got to that revelation was just wanting to get a job. You know, like I wanted to work in global development. Uh, I had spent a little bit of my, my childhood in India. My dad was from India. I had an aunt and an uncle who were development scholars. They used to take me on village visits.

Um, so I had the bug, you know, I wanted to do something to make the world a better place. I wanted to work in, you know, places where there’s a lot of disadvantages and, and you know, I just thought like, all right, I’m in grad school. I’m in the right place to do this. You know, this has gotta be easy. Like, there’s gotta be a website I can go to and there’ll be a list of jobs or a list of projects, or a list of NGOs or you know, the basic information.

And I was totally shocked when I. I asked people about that and they said, no, there’s nothing like that. They basically, the advice I got was go to Washington DC and go to cocktail parties and that’s how you get a job in global development. And I thought, can that really be the way this mission driven sector works?

And you know what? They weren’t wrong. And you know, I learned that, and I’d say it’s still not completely different. But, but we have, I, I hope at Devex tried to make a dent in that. You know, by saying, all right, well, we’ll set up a kind of a neutral space, an online platform that can let any development professional around the world, whether you’re in Washington DC or you’re, you know, closer where the work is, join, get access to basic information.

And so we’ve grown from having, you know, all the jobs and development, all the funding projects, grant opportunities. To a lot of news and that that’s really what we’re mainly known for now, is that we’re an independent news organization. So we’ve got journalists all over the world writing about what are the big trends in global development, what’s happening, trying to like lift up the stories of what’s working, um, but also hold accountable the institutions that are failing, you know, and when things go wrong, talk about that, to be honest, that they went wrong.

And why? And um, cuz I think, you know, going back to when we, when we first got started, devex. There. It wasn’t like there were no newsletters, there was no information, but it was all coming outta communications departments of like the World Bank. And so it was a lot of happy stories about how things are working.

You know, the, the glossy brochures, but there was not a real talk. The real talk happened privately, you know, it happened at the bar between aid workers who’ve been doing this a while, who really know what’s going on. And we just said, let, we gotta break that open. That’s gotta be out in the open. We gotta put some sunlight on how the sector work.

Um, don’t sugarcoat it, but still understand it’s critical work. It’s, it’s absolutely essential. Uh, and that’s why it’s gotta be done right. And so our tagline from the very beginning has been, do good, do it well. If you are anywhere around the dev kind of, you know, ecosystem, you will see that tagline till you’re sick of it.

Uh, but we really believe in it. You know, it’s this idea that it’s not enough to try to do good. You’ve gotta try to find the ways to do it as effectively as possible. And so that’s a little bit better how

we got to where we

Jon: Yeah. I love that Raj, and that, um, resonates a lot with, you know, where we’re at strategically and, and there’s so many good. Ideas and visions out there, and ways we can make change. And it’s so hard to scale these things, you know, it’s so hard to truly achieve

achieve high impact growth. And that’s, um, resonates a lot.

One of the things though, you know, I’ve been in this industry for 20 years and of, of seeing the overnight success of Devex and congrats on, you know, just amazing where everything’s come to. When did that news component come in and what was it like trying to start that up and like, was there. Appetite for it initially.

Cause I think, you know, if you’re a listener to this podcast, you know, um, how broken, uh, certain aspects of this market can be and some of the challenges, and you’ve heard us speak with multiple guests about this, but I’m curious, having been the generator of a lot of this insight and truth, like what was the reception when you first started doing this and, um, you know, over the years are, are people seeking out this information?

Like how does it land, I guess, you know, speaking truth to this industry?

Raj: Yeah, it’s a really good question. I would say like when we, part of the reason it took so long for devs to scale is really the market. The community didn’t accept us right away. They sort of thought like, we heard a lot of good things like you often do when you’re trying to start something new. People are like, yeah, that sounds like a good idea.

But the truth was, most people once we first launched said, you know, we’ve been doing this 30 years. I’ve worked at unicef, I’ve worked at this ngo, I’ve worked in this space, and I know everybody and I know everything. And you know, we don’t need a bunch of kids coming outta grad school with a website telling us information we know already.

And the argument we were trying to make back then was, look, maybe you did, maybe you did, when the, when global development was carved up into these tiny little fragmented pieces, you know, there was U S A I D and a small constellation of contractors and NGOs around it, but Global Globalization’s coming to global development too, you know, and this is becoming a big global market with way more players in it, and it’s impossible to know everyone and everything.

And if you want to do your work really effectively, it’s even more important that you’re reaching out and finding that next hire who is in the community you’re trying to serve, and not just another person sitting in Washington or London. So we tried to make that case. People were with us to a degree intellectually, but there are a lot of market drivers and forces that were just keeping the, the market the way it was.

So that was part of the resistance. So like right from the beginning, we had some news. We had a, a newsletter, we’d go around and like gather up all the news we could find in the mainstream press that was related to global development and we would summarize it, analyze it, and put it in this newsletter.

It was really popular, but after several years of growing the organization, growing our website and all the information we offered, we realized that it wasn’t enough to, to say, we’re democratizing jobs. Here are all the jobs. You can now see them or we’re democratized in projects. You can see them all.

What you really need was context. And, and that was missing. So if you weren’t plugged in, you know, if you were a grad student somewhere else in the world, you didn’t have professors who worked at the World Bank or, or the UN or something, you know, if you weren’t plugged in, you don’t understand the context.

When you see that job announcement or that project, or read this one line of news, it’s not enough to, you’re not gonna understand it. You’re not gonna get what’s going on. And that’s when we realized like, boy, you know, the news business is kind of broken. And you know, news organizations were going out of business.

They were closing bureaus all over the world. You know, maybe this isn’t a great business, but we gotta find a way to make this work because the development sector desperately needs it. And so we started really small. We hired one editor, and then we later on hired one reporter and we just kind of tried to figure out organically how could we build a news organization that would be financially sustainable?

And would really serve the needs of this community and be true journalism. You know, like be hard hitting when we had to be hard hitting. Um, and, you know, like anything else, it took some time for the community to, to kind of get what we were doing. And it took time for us to improve the quality of our reporting.

And um, and there were moments when early on we made mistakes or we would, you know, report on something, you know, a negative critical report that we, maybe we were right about, but the organizations we were writing about were surprised. Like they didn’t know we were gonna do that. Right. But now it’s, we’re, we’re well known as a, as a news organization.

So, you know, people expect that when they get a call from a dev reporter, like, we’re gonna write a hard-hitting story. And it doesn’t mean we’re out to get them or something, but we’re, uh, you know, our journalists come from the New York Times, they come from Reuters, they come from Bloomberg. Like those are the people who are on our team now.

And, uh, it took a while to get there, but we figured out how to do it, I think, in the model. And we’re still growing. But, um, that’s kind of the backstory of how we got into, it wasn’t like day one. It took some time to, to build and

grow

organically.

Jon: You mentioned that that. Context. And one of the things we wanted to talk about was that article that you wrote at the beginning of the year, setting up a context for, you know, kind of a new era of where we’re heading as a development community. Um, and I’d love to kinda hear your summary of that article.

And then I want to dig into the, the key points that you mentioned on it.

Raj: Yeah, sure. Um, so like I read a piece at the beginning of every year and it’s tempting every year to say it’s a new era. You know, like everything is gonna change. Or to say like, this is the most important year in development that’s ever come. And there’s some truth to that, right? Like every year you, you that comes along.

Issues like climate get worse. So you can kind of see on the horizon and say, boy, this, this is different. But as I sat back and like spent the, the holiday break, really thinking about some of the threads of the coverage we’ve done during the year, the conversations I’ve had, you know, one, one of the joys of my job is I get to interview, you know, I dunno, hundreds of people talk to hundreds of people during the army, thousands of people, um, all over the world and get their take.

And so trying to synthesize that together. I really began to come into this idea that we are actually entering a new era, not just like a, a growing shift, not just the trend that’s kind of accelerating, but like actually some fundamental shifts. Um, and like anything else, you could see the history, the breadcrumbs of them in the past.

They didn’t just all happen January 1st, but like they are at a different stage I think. So there’s a few of them. I think one is the growing competition even conflict with China. Russia and the West, and that bleeding into the global development space. So that’s like one really big picture, one that I think there’s a pretty fundamental shift that’s happening.

The second one is the, the global economy, like the macroeconomic conditions under which we have kind of gotten to know like people like ourselves who’ve grown up in global development over the last two or three decades. We’ve known this is a space that had zero interest rates. Money was cheap. Western donors were ready to ramp up their spending and their budgets.

There were big new initiatives like pepfar. That’s the era we’ve come from. We’re entering a really different set of economic circumstances that I think is gonna shift the ERA pretty dramatically. So that’s a second big trend. And then the third one is that, You know, we’ve always had humanitarian response as a piece of the broader global development sector.

They’ve always been somewhat siloed off. We talk about the nexus between humanitarian and development, but somewhat siloed off and always, I don’t know, around 10%, 15% of global development spending goes to humanitarian response. That has started to dramatically shift, and I think you can see the climate and the conflicts that are accelerating around the world, and you can see humanitarian response needing to get much bigger.

Um, and beginning to almost swamp what we think of as global development. So, so those are the three big trends that I see really shifting. I don’t think it’s like a 20, 23 thing. I think it’s a 2023 all the way to 2030 and maybe beyond. Like I think we’re, these are pretty big shifts and I’m happy to get into them a little bit more, but that’s kind of the big picture that I’m, that I came to as I was working on that

Jon: Yeah, that makes a ton of sense. And um, I, I definitely agree with you. Every year you can say this is the most important year. I mean, we. Have just come out of Covid and you’re seeing TB and H I V, you know, reverse course for the first time and. Decades. Um, we have vaccination rates decreasing, and so the, the traditional stats are all looking daunting to begin with, you know, in terms of like, this has to be bigger to recover.

And then you layer on those three key critical areas. And one of the things I’m fascinated to hear, you know, how you think about this complexity, but we look at this challenge and, and say, The only path out of this is five x or 10 x more value for money. Cuz as you said, the humanitarian needs are gonna grow.

They need a bigger part of the budget. The total number of people who need services and support is growing. Fortunately, we’re seeing huge economic gains and massive markets like India and elsewhere. So that’s a really positive part of this story. But we look at this and we’re like, Yeah. Given those three convergent factors you mentioned like we have to, as an industry be getting massively more value for money, and one of the things that frustrates me personally is I look at some of the project designs and some of what governments are even asking for, and I’m like, you’re asking for the wrong thing.

Like we’re, we’re in a new era. You need to be thinking about ways to get so much more than just a single project. You know, for $50 million, we have to be thinking about how we both get that project done and then layer on this foundation, right, this change. And I think that foundational thinking to me is we’re early in this journey, um, you know, as an industry and as D Machi, but I’m like, there’s just no chance we’re solving this right.

With a, with a project, project-based mindset anymore. And I’m curious like how, how you think about that.

Raj: Yeah, that, that’s it. You know, I wrote a book a couple years ago called The Business of Changing the World, and, and in that part of what I’m talking about is this like broader revolution in the way we do development, the kind of how of our industry. And that’s exact one of the key points I make in that book is that, you know, if you go to like, you know, you name the capital city Cali, right?

In especially Donor Darling countries where there’s a lot of aid work going on. And you go to the, the international hotel, you go to the bar where like everybody hangs out and you know these, there, there are these places, right? And you tap on somebody’s shoulder and say, Hey, you know what’s going on. The conversation is always based around a project.

It’s like, Hey, what are you doing? Oh, I’m here. I’m here on this new project. Or you know, we’re just, we’re re-upping this project or here to monitor this project, right? Like, it’s all about a pro. That’s our unit of activity. You know, maybe on Wall Street it’s trades or something, right? Like every industry has their unit of activity in development as projects.

And I think that is a huge thing holding us back. Uh, it’s like the wrong mindset. It’s the wrong measure of success. It’s the wrong unit of activity. And we’re there in part because of the, the reality that historically most of the money was coming through government agencies. And government procurement is naturally project oriented, right?

They need to, they can’t like fund something forever. So they’re thinking about a timeline. They can’t, they have to have a budget. It can’t be kind of loosey-goosey. They gotta say this is the amount they need to define it really well, cuz it’s taxpayer money. Like you gotta know what you’re buying and you need to have a lot of controls around that and risk mitigation, you know?

So that’s kind of why we got into this, I think is. Government money for good reasons is spent in this way and it just doesn’t fit the needs that we’re talking about. It just doesn’t work. So, you know, a lot of good things happened outta projects. It’s not like they’ve all failed, but they are just not suited to the, to the realities on the ground in terms of what people need.

And so that shift is gonna be very, very tough. Now. A couple things have have changed, and I get into that in my article versus when I wrote the book. So one big one. Is because of the economic circumstances and the humanitarian needs growing, um, rich country governments in the west, the us, Germany, uk, et cetera, they’re basically cutting aid budgets or plateauing aid budgets at the same time as the amount they have to spend, the proportion they have to spend on humanitarian is growing fast.

So what does that mean? It means there’s very little left for development, that that amount is gonna shrink and shrink and shrink. So where is the development funding gonna come from? And I think there’s basically two other sources that are now gonna get like front and center in our sector. One is the multilateral development banks and this really big push to totally reform them.

Take them from being bankers to countries, you know, lending money to build a road or something, to being more like deal makers, more like investment bankers. Where they say, all right, how do we help electrify your transportation system in your country? Like, we’re not gonna do it. We’re just gonna provide some expertise.

We’re gonna provide some risk capital. Like we’ll take some of the loss. The first losses we’ll take, we’ll guarantee some of the investments, but it’s really private companies, private sector, private investment. That’ll do it with the government of that country. So the MDB reform is a potentially really big idea.

To crowd in a lot of money and corporate expertise into development. Work from a slightly different angle, but really big in health. Really big in in clean water and sanitation. It could be big in transportation, renewable energy, and those sectors that have some kind of business model behind ’em. Or you can like generate some revenue.

And then the other space is gonna be philanthropy. And you know, philanthropy has been threatening for a long time to get big. It hasn’t really quite done it with a few exceptions. Um, but I think it’s really gonna come, and part of my thesis here is not just that there’s so many billionaires in the world and you know, 10% of them or so have signed the giving pledge, and so they’re kind of on the hook to do something.

But part of my theory is with the economy shifting as it is, there’s just gonna be more and more pressure on taxation in a lot of the rich countries. And at some point something’s gotta give. And it is not gonna be as easy as it’s been to just park billions of dollars in foundations and not spend it or just hang onto it and not spend it.

It’s, there’s gonna be a, there’s gonna be some real pressure to quickly, before tax law shifts, get money into vehicles that are protected from tax, but that then by new rules have to start spending out that money more quickly. I think that’s coming. I think billionaires see that writing on the wall already.

And I think they’re gearing up to do a lot more. So I think there’ll be a flood of billionaire spending. And the Gates Foundation alone is gonna be at 9 billion annually. Um, in two years. That’s like, versus the uk what the UK actually spends globally, not just on domestic things like refugees in their border.

They might be bigger than the uk. I mean, it’s, it’s pretty amazing one foundation. So I think that a big part of it is the nature of the money coming into the space is gonna be really different. And that might help get to your point, John, about the project nature of our industry. Because the philanthropy money doesn’t have to be project based.

A lot of it is, but it doesn’t have to be. And the private sector money also can have a different feature to it. Right? These can be more like business models that you’re investing in, uh, like you’re investing in the water system of a country or the transport system. You’re not, you’re not doing one off projects necessarily.

So, So I think there’s a chance in this transition to try to frame it, frame this, and, and make it work in a way that’s more connected to the needs on the ground in in countries right now.

Jon: Yeah, I love that. And w. Just to replay a couple things you mentioned there that I think are critical. One is this project-based funding problem is not a symptom of something broken. It is the way taxpayer funded things happen. Right? You have to have like for all the reasons you just mentioned, so when we’re talking about foreign donor assistance from formal governments backed by taxpayer dollars, it is really difficult to get outta the project-based funding.

Mechanism. And so what we need to be considering and looking to is maybe we accept that that’s how that money is gonna get deployed. And we say, how do we generate huge impact with that money, but also looking at the alternative to mechanisms you mentioned. And I think that point around both the existing foundations growing substantially.

But as you mentioned, um, you know, we have a lot of challenges in Western countries. The US specifically, you know, is huge looming problems with social security and growing, uh, unfunded liabilities. And to your point, like. Either we’re gonna back outta those liabilities or tax rates are gonna go up a lot, um, you know, for certain demographics in the United States.

Raj: And things like foreign aid might go down, right? I mean, um, certainly before you cut Social security benefits, right? Like the political demands are gonna

be very powerful

there.

Jon: as you mentioned, um, you know, urgent humanitarian crises that are on tv, um, you know, that really are, are have a major constituency, are obviously going to outstrip long-term development planning. When push comes to shove, when they become political issues. And so I think that backdrop is so interesting that you tied that together and, and, and really prescient for also what’s happening in the technology world with this explosion of ai.

And, um, you know, you wrote this article before technology looked like it was about to be, you know, once in an air transformation. But, um, bill Gates released a note, you know, about. This is, you know, one of the, the major technology changes he thinks we’re ever gonna go through, and so that all coming together to me, you know, it’s both.

Scary, you know, in a lot of ways looking at what’s going on in the rate of change in technology, but it’s also incredibly exciting as a potential answer to this new era or a potential contributing support factor to this new era. So I’m curious, like, you know, what are the technology discussions you’re having?

How are you thinking about technology in the, the backdrop of what you just mentioned?

Raj: Yeah. Two, two quick thoughts about that. So one, just going back to what you were saying about the project funding from bilateral donors like U S A I D. I think even within their constraints, there’s a lot more they can be doing to get away from their traditional project model. I mean, you have things like the development innovation ventures, diviv, which is like a tiered funding approach, and that has helped launch a whole bunch of, you know, groups like yours that do tech-based, you know, social enterprise work.

The US government can take a small risk, you know, $50,000. See if you get to a milestone and then take a $300,000 risk, then maybe a later a million dollar risk as you show progress. I think there’s still a lot of innovation where even if development funding becomes 30% or something, or 20% of total foreign aid, it could be spent a lot better.

There are other ways to do it. So I don’t wanna let them off the hook on that, you know? And then this my second point, and a lot of that might be around technology, by the way. So my second point would be when it comes to the revolution in tech, I think a lot of it’s unlocking the potential of the people who are closest to the problems.

Right. So like, you know, think about community health workers. You know, they’re there, they know the situation well. They have certain skills. What can you do to, to just get way more outta that person, make them much more productive. And, and I think historically we felt like tech is. Just, I don’t know. It’s, it’s cumbersome, it’s expensive.

It’s like, and I remember going to Ethiopian meeting with, uh, somebody who’s an education expert working there, and he gave me like 10 reasons why they’ve tried to use tablets in the schools and it just failed, you know, and they’re all good reasons, but it does feel like we’re hitting this tipping point where the price curve on hardware, you know, at point, you know, point hardware where people can put it in their hand, a smartphone or a tablet or whatever, wearables, it’s just getting really cheap.

And we’re also at a point where the computing power at the edge of the network is getting really powerful. You know, and the idea, you could use something like a, a Chachi PT in the hands of a community health worker and use it as a diagnostic tool, use it as a tool to even prescribe like basic, uh, healthcare advice to people.

Like there’s a lot. And if you can get wearables really cheap, And you, you know, use sensors to find out how the patient is doing. Like you could have just imagined really unlocking massive potential without having to wait for skilling up and training up a whole new generation of nurses and doctors, you know, which is gonna be very tough to do given the demographic ch issues.

Right? So, yeah, I think the, the, the potential is absolutely massive. And so now the question is how do you create the business models so that there’s actual incentive to. Grow into this and to get companies like yours to build the solutions using the latest tech. And, and that’s where like the MDB reform is really big.

Um, you know, that’s where philanthropy can be really big. Looking at these as sectors and like, how do you unlock them? I, I was in, um, I was just in Medelen recently who was meeting with a social entrepreneur who, um, is working in the electrification of cars space. Right. So he’s like, look, Places like Medellin, places in South America and Latin America, we’re probably not ever gonna be rich enough to just get rid of all of our gas guzzling cars and buses and just buy Teslas.

That’s not gonna happen. It’s not gonna happen on, on the time scale that is needed to cut emissions or to reduce pollution in cities. So it’s like the, the other thing we can do instead is take these old cars, swap out the motors. For electric motors, swap out the gas tank, put in a battery. So that’s what he is trying to do.

And he’s doing, he’s built a business doing that. Um, but he’s gotta buy the, the battery from Tesla and he’s gotta buy the electric motors from China. And he, there’s another company like that in Argentina. There’s one Uruguay, like people are trying to do this. And the new era I’m envisioning is one where the World Bank.

With a foundation backing them with the government, like a progressive minister of transport in a certain country. They get together and say, how do we, how do we build like an electrification of gas guzzlers across three countries? We could build a whole market. We know we’re gonna need like charging stations, we’re gonna need battery productions, factories, we’re need electric motor factories.

We’re gonna need this whole like broad mindset, but there’s a business here. This is not just a gift. There’s a business. We might need the foundation to be willing to throw some money in the beginning. Technical assistance, some grants help get some social entrepreneurs going that are gonna lose money.

Like they’re gonna just do some big grants. Those will go away. They won’t get that money back. We might need the World Bank to guarantee some private investors and they might lose something on that. But it’s a different mindset I think. I don’t think we think about this in development and it is, it is very much with the.

Technology and a business model at the center.

Jon: I love that. And um, we’ll drop a link to the show notes, but Dev wrote an article on one of our major new initiatives that’s very much aligned to what you were saying, Raj, around how do we change that model and unlock the potential of those, those frontline workers. And I think that we’re seeing that in high income markets too, right?

There’s been this huge shift around really going back to industrial policy, you know, whether that’s chip manufacturing in western markets, whether that’s China just exploding with what they’ve been doing around. EV vehicles and solar and these things. So you’re seeing that strategy happen at high income country levels, and I completely agree doing that at the development sector and looking at not a project base, but how do we turn Malawi into a leader in X or Zambia into a leader in Y.

And you’re gonna have to come across all of those different parts of money that you mentioned. You know that, that grant funding.

The first loss backing the loan and, and the equity all coming together in a, a stack that makes sense for all the participants. And I think one of the things that drives me crazy is you have to do all of that and then recognize some of the market is just traditional development after that, right?

So if you build all that infrastructure, part of it is driving vaccines to more remote areas that don’t have petrol, and you can sell that to Gavi. And what I think makes this challenging to have a lot of the time and be innovative is the second you say that, people are like, oh, you don’t have a sustainable model, right?

And you’re like, no, no, no. This is totally sustainable. We need to deliver vaccines every year forever with this model. So it’s okay, that part of my funding. For this. This model is coming from the traditional sector for that project based approach, but I totally agree that’s not sustainability. That’s a market, right?

That’s the project based market, and I need all this other capital to build the foundation, the platform, the tech, the people, the charging stations, et cetera. But I really like the way you articulated that.

Raj: And you gotta find the places where there is a business model, where there is some potential revenue, and make sure you’re using that, those opportunities so that you can save the precious grant dollars. For things like vaccine delivery where there isn’t gonna be a, a direct business line, you’re not gonna charge people for vaccines.

There’s an indirect one because people are healthy, can work, be productive, pay taxes. The government can make money through taxation and fund the vaccines, right? So there is a, there’s a virtuous cycle, but it’s not so direct. Whereas in the water space, you know, people are right now spending money out of pocket to buy water, have water trucks come to their house or something, or buy jerry cans full of water.

So you could potentially say, all right, instead of paying for that, we can build a long-term sustainable solution, uh, water infrastructure. It’s piped into your community or into your home. So we gotta find, we gotta use those opportunities so that we can save the precious $8, which really are very precious for the right things.

A lot of which I think are around health and education, and you’re gonna, uh, even in health, there are plenty of things that have business models, but, you know, there’s a lot that won’t. Um, so yeah, I, I’m absolutely with you on this. I think. I think we, it’s, it requires something of a shift in the way we’ve been thinking as an industry.

Now to your point about industrial policy, one of the factors I mentioned at the, at the beginning, uh, those three factors that are changing this new era, shaping this new era. One is this Cold War with China. Um, I maybe we’re not all the way into Cold War yet, but boy, it feels like we’re getting there.

And if one of the features of that is I think industrial policy, That we’re seeing in the US chips a we’re seeing in Europe that is gonna extend into global development cuz all the things we’re talking about have a technology backbone. And right now a lot of that technology backbone is coming from China.

Like Huawei provides much cheaper handsets than anybody else in the world. So a lot of this is gonna come from there. And, you know, development agencies are waking up to this, there’s already, you know, congressional rules and things around this, but, I feel like there will be a time soon, or there’ll be a trend in the direction of eight agencies saying, hang on a second.

We want to do digital health, but who’s manufacturing the routers? Who’s providing internet connection? What’s the handset? Uh, what software are we using? Okay, we want to do industrial policy. We want to guide this because we want it to be our stuff, you know, or from stuff from our neighbors and allies. Uh, and so I have a feeling this is gonna extend right into all the sectors we’re talking about, because it’s gonna be driven from the really strong political imperative, which is China.

If you, if you wanna sell anything on Capitol Hill right now related to global development, it’s saying, Hey, this is a way to confront China. That’s the sale. That’s the only thing that is bipartisan. It’s the only thing that gets everybody together right now, and I, I think that’s gonna continue.

Amie: Rajan within that context of this new Cold War. One of the things that you wrote about in your piece was around localization, , which I know is a big push right now from U S A I D, so kind of from that government money. I’m curious to hear your take on, like how do you see that playing out?

What’s, what’s the ideal scenario for what. What’s possible there? And what are, what are some of the things that you’re, you’re worried about there?

Raj: Yeah, I think you know most everybody. In this space wants localization. Like, they’re like, yeah, this is good. We want this. Even maybe surprisingly, organizations that will lose money. Some of like the really big NGOs, you know, I’m friends with probably a lot of the CEOs, the big international NGOs, they’re all big advocates for localization.

And I say to them, you know, you’re gonna lose money. The funding is not gonna flow through you. If we can figure out how to do this better through local organizations, say yeah, it’s fine. Like they get it cuz they’re committed to the broader goal and everybody’s frustrated. It with this project approach and the way it, the way it works, right?

So there’s real consensus there. I think the problem is when we say localization, that’s not really the thing that’s gonna get us to the results that John is talking about. When you say, Hey, we’ve got a five x 10 x returns on, on the, the precious, you know, foreign assistance dollars we have, we need a more fundamental shift, which is the shift to like paying for results.

Uh, you know, the other buzzwords like impact economy, right? Where it’s like we’re, we’re buying a result, we’re buying health, we’re buying education. We’re not buying a project that, that spits out a report at the end, whether or not it actually worked. And that shift is more fundamental than localization.

So if localization becomes, okay, there’s a target, and instead of giving project dollars to a US based company or ngo, we’re gonna give it to a. You know, Zimbabwe based country company or NGO that, you know, maybe that’s a mild marginal improvement, but it’s pretty small.

the the thing we’re really after is a, is a more fundamental shift if we want to see this step change.

So, you know, I, I think it’s be very hard to get that done because of all the things we just talked about with the, the, the nature of the government model. But the reason, I don’t wanna let them off the hook on this and not talking just about US government. I’m talking about all bilateral donors. I think there’s an opportunity vis-a-vis the conflict with China to say, Hey, what makes Western Aid different is that we are thinking about long-term sustainability by being community driven and by connecting with the private sector.

And instead what we get from the more Chinese model might be, okay, no strings attached. We do what the government wants. Um, but you’re not getting long-term sustainability because you’re getting a lot of Chinese labor. You’re getting projects that are infrastructure focused that support a Chinese economic model, but you’re not getting what you need to grow your own country and economy and citizenry.

And so maybe there’s some way we can position the offering that comes from Western donors in a different way that encompasses these changes We’re talking about. And that makes, that’s e that’s even more compelling than just localization, right? Um, I, I’m hopeful there may be something like that.

Something more on innovation, sustainability, locally driven solutions, you know, payment for results that, that could become like a signifying difference. Um, and then if that’s true, then you can build some political support for that and maybe get some of the reforms you need. For bilateral donors and the people who run them to have the flexibility that frankly they want and they wish they had to do this.

Like a lot of people work at USAID or fcd o or you name it, they would love nothing more than to change the way they work, but they don’t have the staff to do it. The capacity the authorities, like they’re just laboring under really challenging circumstances. Um, so maybe there’s a way in this new era to shift that.

Jon: I like that and the not letting them off the hook. Um, you’ve used that phrase a few times and I think, um, that’s definitely something I’m taking away of, of thinking through because we often talk. About this in the digital space of like, we’re letting people off too easy. You know, we’re all accountable for trying, but nobody’s accountable for actually succeeding.

And we, um, we think it’s kind of like just too low of a bar. You know, we’ve set for these digital health projects, like we can get way more out of this, these dollars. Now yes, it does require different partnership models. Yes, it does require better localization. Yes, it does require breaking out of project funding, but for the amount that we’re spending, On digital, we could be getting a lot more value for money, you know, in our opinion.

And we’re gonna have to, right? We’re gonna have to get this five extra to X result given what we’re facing.

Raj: That’s right. And I think it does require that looking at these problems from a higher level, because once you get down to the project level, it’s very tempting to say, oh yeah, all these other health, digital health projects have failed. Look at them. They’re all, they spent a lot of money. They didn’t do that much.

So we’ve got the new idea. We know how to do it. Let’s go. Let’s do something a little bit different this time. And you don’t realize that what you’re actually doing is doing another pilot. You know, because you’re doing something small and, and it may not scale. And so somehow you need to get the foundations to drop a little bit of their ego, do more collaborative philanthropy.

And some of that’s happening, not, not enough, I think, but some of it is. So, you know, give up the, the need to get the credit to say, we’re the innovative ones. Like get a few foundations together, get a few bilaterals together, get the right governments or the right, you know, progressive ministers together in the right places and say, Hey, we could do something at scale.

What would it be like to design this thing for scale right from the beginning? Okay, to do that maybe we need a lot more money. Who are the private sector investors who could invest in this? Who are the tech companies we could partner with right from the start and build a model that could actually have a shot at scaling and, and take a much bigger bet based on all the learnings we’ve had of all the digital health projects that haven’t really gone to scale.

Um, I don’t know you, you’re closer to this John than me cuz you work in this every day. But I, I just feel like our ambition sometimes

is too

small.

Jon: I, I totally agree. I think that notion of taking bigger bets is critical, and I, I acknowledge not everybody has the funding or the ability to take those big bets, but. What we often are doing too, as you mentioned, is, is taking a really small bet and thinking we’re taking a big bet, and that’s extremely harmful because then what happens is people look at that and they’re like, well, this big thing didn’t pay off.

You’re like, no, no. You put half a million dollars behind that with very little thought, very little effort. It was basically the same thing all over again. Like we shouldn’t have expected a different outcome. And I think that’s why I’m, I’m excited by some of the work that co-develop is doing around digital public infrastructure.

You see this amazing work happening in India around the health stack and the work that they’re doing, and we’re starting to see these shifts in these bigger investments, taking bigger bets, and they’re working. You know, not every time, and we’re gonna have huge amounts of failure, but what often happens, and, and you know, this is the part of the, the world that you, um, work in all the time with the bigger I NGOs and things, you’re kind of forced to pretend like everything’s a shirt thing.

You’re not even allowed to say it’s a bet in the first place, right? You’re like, okay, this new

project, of course it’s gonna work. Gimme $50 million and, and I guarantee this outcome in five years. And then you get a 50% failure rate on these projects or even higher. But when you write that next grant, you’re still presenting it like a sure thing, right?

So the other thing that I think would be really healthy and helpful is acknowledging these are bets, right? Like we, we, we are in fact all taking bets on the likelihood of new technologies or new things. Like some things are sure things, but those are few and far between. And they, they need to potentially get even fewer and further between, given the magnitude of the problem we face.

But so much of the time,

you’re forced to pretend like the thing you’re proposing to do is definitely going to work. Right.

Raj: Another word for a bet is an investment. Right. Investments can succeed, they can fail. Uh, you know, if you’re in venture capital, most of them fail, but you’re looking for a couple that really succeed. Um, you know, if you’re in private equity, you, you want more of them to succeed, right. But they don’t all have to.

Um, you know, so it depends like where you’re coming from. But if you’re in a foundation, you can afford to really lose the money. I mean, you’re, you’re spending it anyway. And you can therefore take some of that risk away from some of the investors depending where they are in that stack that we’re talking about.

And so, yeah, I think invest like an investment mindset is maybe even better than a bet mindset, you know, like take an investment mindset to digital health in India. And, and like you, you probably know the case of India way better than me, but my understanding is like some of the big Indian telecom companies, Saw the business opportunity to give away free phones and free data access to people living in poverty because they said, Hey, this is actually good business for us.

Cuz you know, maybe they can’t pay today, but they’ll start paying for data in two or three years and we’ll be able to get the information about who they are and sell other services to them. And so, one reason why in a market like India, you could potentially do digital health work at a really high scale is because that digital infrastructure has been rolled out by private companies trying to make money.

And that’s kind of my point is we should be partnering with those companies. We should be thinking about this at this higher level and, and figuring out how do you roll out right at the start digital health services as somebody’s getting that phone from Reliance. Right. Um, so I just think like there’s a different mindset needed, this investment mindset and, and if we can get there, we can maybe get to some of the five x 10 x returns that you mentioned at the

start.

Jon: Absolutely, and I, I think that investment mindset and framing is critical cuz for the investments to work, people also have to acknowledge four to five were gonna fail. And that is currently very challenging for anybody to accept because this isn’t how we’re structuring our thinking or the portfolio or thinking at that higher level.

But when you take kind of that holistic approach you were talking about with looking at the entire industry or taking three countries and really putting a package together, you might have 10, you know, components in there. And if. Seven succeed, you hit a home run, but that still means three are outright failing.

Three are probably like, you know, marginally good, and four worked. But again, like the whole industry kind of pretends as if everything’s gonna work and you can’t have these

honest conversations about the level of risk. And that makes it very difficult to, to unlock this different way of thinking. And I, I’m, um, totally aligned to, to how are you thinking about that problem and speaking about it.

And that’s one of the things we face as a challenge because technology has huge potential. And it’s not a software issue. You know, it’s, it’s a governance issue. It’s a use case issue. It’s an adoption challenge. So you could have perfect technology and it can still fail, but people will often blame the technology and then say, oh, that thing doesn’t work.

And it’s like, well that didn’t work in that use case, but this like platform theory or this public infrastructure theory is still a very good one and we need to look at and learn from what didn’t work. And one of the things I’ve tried to see if, um, some of the bilaterals could. Could think through more fully is there’s this learning agenda that’s required to have an investment mindset, right?

You have like figure out why did that not work? And you have to also think it was worth the failure, right? Like what I learned from that is now going to make me smarter in their future, and that’s now going to give me ultimately a higher return for my taxpayer dollars that I’m putting in. So even if this innovation on PEPFAR or Global Fund didn’t have the outcome I wanted.

As long as we actually learned successfully from that and had honest conversations the whole way that will ultimately, hopefully drive to future innovation that doest in fact make that failure positive roi even for taxpayers, right? Much less investors.

Raj: Yep. Yeah, I think you know, Maybe what we need is for some of these bilaterals to say, we don’t need to be driving this. We don’t need to be in the driver’s seat. We don’t need to like figure out the problem. Define it, define the solution, right? And then take this bet. Um, maybe what we need is sometimes the humility to say like, there are other organizations that know this way better, and some of those might be foundations like the Gates Foundation, right?

And say, Hey, you guys know this way better. What do you think we should do? Like, let’s think at this really high level and then we in, in the Danish government or the Norwegian government or the US government, like we’ll back that and maybe multi, multiple bilaterals will back that big initiative, but we don’t have to like own it.

It doesn’t have to be ours. Um, and I, I think if you can get there, you can get away from this pilot problem we’ve got where everybody wants to do their own thing, they wanna take credit for it, they wanna put their brand on it. Uh, they think it’s their job to solve the problem, right? And I just don’t think it always is.

Jon: Yeah, that, that’s a great point. And the notion that you had around Pay for Results also has a huge contributing factor because when you’re stuck in this project approach and, and constantly restarting the next thing. You’re paid for starting the project, right? As opposed to being paid for succeeding at achieving the outcome you said you would, and that, you know, I’ve found that in the technology space, I assume this is true in other sectors, it completely messes up your brain like it’s this toxic thought that’s always in your head when you know the money’s in starting the next project, as opposed to making sure your current project is actually successful because it causes you to underinvest in.

Partnering causes you to underinvest in the ecosystem. And again, I don’t think this is unique to technology. It’s, it’s a disease of the project mindset, and it causes just huge lost opportunity along the way because you’re constantly defending the project as opposed to achieving the outcome. Right. And that, that’s something that I think is, is so important to unlock because again, for the same amount of money, if you can change that mindset, you’re gonna find so much leverage and partnership opportunity and localizations gonna happen naturally.

Cause that’s actually the better way to get a lot of this done in the first place.

Raj: Exactly right. If you’re paying for results, and there’s a real marketplace for that, and it’s like, all right, who’s got the cheapest intervention that’s most likely to work to raise literacy rates? Chances are they’re gonna be heavily locally, you know, implemented. Like that’s, that’s just the reality. So if you can get to pay for results, you probably achieve localization anyway, versus the way that we may end up doing it right now, like in the us, which is more around, we’re gonna set some rules, we’re gonna change the rules of the contracting game, gonna just push more money to local contractors.

That’s not actually what we’re trying to do, I don’t

think. It

doesn’t really

connect

to the

ultimate goal.

Amie: Well, they’re still executing on what the US decided should be happening. Right. They’re executing on the project.

I think this is, this is really fascinating. I’ve been like just learning so much, listening to you both, and it sounds like There’s a few themes coming out of this in terms of

how we need to shift things, , I hear you Raj, talking about collaboration, ? We need to be getting together and looking at what works. I also heard you talk about humility, ? Which, you know, one of my theories of the world is just that like, egos are at the heart of like so many of our problems.

Jon: I have

no idea what you’re talking about,

Amy.

Amie: And, and we all kind of need to have that humility to work together and to be honest about what’s working. I also love this, this idea of this kind of shifting to more of investment mindset. , and what does it look like to kind of pay for results as opposed to projects.

And I’m curious, Raj, in, in closing, like what, what are some of your key messages if you think about. Maybe think about our audience in sort of two groups, like technology implementers and technologists, um, you know, working at organizations like dimagi. And then also I think we’ve got a, a funder audience as well.

Like what, what do you want each of those groups to be thinking about and, and doing differently to take us forward.

Raj: I guess I, I would love the technologist to think about solving a problem in development the same way you would think about solving a problem in a rich country market. Like if you’re gonna try to solve a problem for, you know, some wealthy zip code in Silicon Valley, um, how do you go about doing that?

Okay, now think about that for a low resource setting. Do it the same, do it the same way. You know? So if you would go and talk to customers and ask them what they think, figure out how much they’re willing to pay for the service, figure out what their existing level of digital connectivity or literacy or whatever is.

Do the same thing in a low resource setting and help basically have the people themselves design their own solution. Like tell you what they need, what their pain points are, and have them design the solution. And then I’d say to the funders, when the technologists do that, Listen to them. You know, like fund those ideas, those businesses, cuz they’re kind of like businesses.

They might not all generate revenue, but fund those, those ideas that are gonna have a kind of market mechanism built in cuz they’re, they’re demand driven. Um, and don’t force them into your box. Don’t say like, no, well we we’re gonna do a project and it’s gonna have this timeline and find a way within the authorities you have.

To give them the technologists, the, the social entrepreneurs to give them what they need to be successful. And I, I really believe a lot of donors, funders, they’re doing this, they’re trying, I think they need to step it up. There’s more to do, but there are a lot of the authorities are there, a lot of the models exist.

This is not all brand new and, and plenty of people have been doing it. So it’s just time to really step it up.

Jon: All right, so on that note, we’re gonna ask everybody to step it up, who’s listening. And, uh, Raj, we really appreciate your, uh, your time joining us today. Thank you for the, the wise words and great to catch up as always.

Raj: Thank you. Thanks, Amy. Thanks Johnson for fun.

I’ll share my takeaways. We heard from Raj about his experience, creating dev ex and how his team has successfully made the aid industry more inclusive, accessible, and honest. Before dev X communication was dominated by world banks and other funders.

Telling Rosie stories of success, dev X bridge, the gap for honest journalism, and I highly recommend subscribing to their Newswire. Looking ahead, 2023 marks a pivotal year for the development industry. Rod highlights three converging factors. A new cold war for foreign aid. A new economic backdrop and accelerating humanitarian needs due to climate and conflicts.

John and Raj conclude that because of all these shifts, the only path to reasonably meeting the growing needs globally. Is getting five or 10 X more value for money. And doing that requires a shift in mindset.

From a traditionally project-based mindset which is just not working to more of an investment mindset. Roger breaks down three types of funders and shifts that are or need to happen.

He talks about traditional government donor funding and how it’s shrinking. And encourages government donors. To consider new ways of investing in development beyond the project based mold.

Next two ducks, multilateral development banks that are undergoing a transformation to more of an investment focused business model.

And he also talks about philanthropy, which he sees is poised for growth. 10% of billionaires have signed the giving pledge. And they’re under more and more pressure from taxation to spend it more quickly, and the beauty of philanthropic funding is that it can happen at the platform level.

Roger’s closing message is the technologists need to operate in development the same way that they would operate in high-income settings. Understand the problem deeply and develop solutions, . And funders need to listen to the technologists doing that and invest in them.

Technology’s at a true tipping point. It’s getting cheaper and more powerful with increasing ability to unlock the potential. We have the opportunity. And the need to get more value for money across the board. That’s our show, please like rate, review, subscribe, and share this episode. If you found it useful, and write to us@podcastatdimagi.com. With any ideas, comments, or feedback.

This show is executive produced by myself. Danielle van wick is our producer. Brianna DeRoose is our editor and cover is by Sudan, Chicano.