My talk on earning to give

Which I gave last weekend, can be found here. I learned a lot from the ensuing discussion, which is included in the linked audio, so I strongly recommend you give it a listen.

The discussion continued after the part recorded above, and during that time someone made an interesting point, relevant to wannabe tech entrepreneurs, that I think is worth sharing: supposedly entrepreneurs generally only capture a couple percent of the value they create. If that’s true, it doesn’t automatically make entrepreneurship a noble endeavor in all cases, because some entrepreneurs make things like Candy Crush that people only spend money on when they’re well-off and have nothing better to spend their money on than trivialities. But if you, as an entrepreneur, make something that people in the developing world are willing to pay for (which they’ll only do if it really is providing value to them), that may be a good way to do a lot of good. I don’t know how to put this into practice, but it’s something to consider.

Edit: Here’s the online handout for my talk.

  • http://benkuhn.net/ Ben Kuhn

    Citation for the claim you mention (I was the person making it in the
    discussion): William D. Nordhaus, “Schumpeterian Profits in the American
    Economy: Theory and Measurement” (link:
    http://www.nber.org/papers/w10433 )

    From the abstract:
    Schumpeterian profits are defined as those profits that arise when firms
    are able to appropriate the returns from innovative activity. We first
    show the underlying equations for Schumpeterian profits. We then
    estimate the value of these profits for the non-farm business economy.
    We conclude that only a minuscule fraction of the social returns from
    technological advances over the 1948-2001 period was captured by
    producers, indicating that most of the benefits of technological change
    are passed on to consumers rather than captured by producers.

    Standard
    caveats about model error and external validity do of course
    apply–this is only a study of the American economy and things may work
    differently in the developing world; it’s a fancy economic model that
    may be wrong; etc.

    On the other hand, the way to “put it into
    practice” is pretty straightforward: go move to the developing world and
    start a business!

    PS Argh, Disqus hates me. Sorry for the triple-post, this one has the correct formatting and stuff.


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