Angela Oh - Week 7

Botswana has experienced a major transformation of its national image and economy. At its independence, it was one of the poorest states in the world. However, due to the lucky discovery and abundance of diamonds, as well as good leadership and government policies, Botswana has become an upper-middle income country. Although its economic success is remarkable, it also came with its own set of issues: high rates of unemployment and income equality.

Rising inequality is also an increasingly prevalent issue in the US. The richest 1% have accumulated 20% of the nation's wealth, following a continuous growth of rising disparity between the highest and lowest income groups in the country. This can be attributed to our capitalist economy, in which profits are prioritized. However, a potential solution to worsening income inequality is social entrepreneurship. By creating innovative and problem-solving products/services that prioritize benefitting society, rather than squeezing out every last penny, the issue of income inequality may be alleviated.

In order to have an enterprise accepted and endorsed by the government, entrepreneurs must design a profitable, yet socially beneficial service. The tourism industry in Botswana contributes about 8.5% of the state GDP, making it the second largest industry in the nation after the minerals/diamond sector. In the beginning stages of the tourism industry, the government was clear on its belief that tourists would offer very little economic benefit. In addition, they felt as though tourists would "potentially cause substantial degradation of the fragile ecology on which the country's tourism" depended on (Lewin, 7). So in order to grow with the government's endorsement, the industry implemented profit-seeking policies as well as sustainable tourist practices. In doing so, it successfully addressed the government's concerns and provided effective solutions.

To have our holistic health and well-being app approved by the government, we would emphasize both its economic and social benefits. The app is revenue-seeking, as it is designed to receive a cut of the advertised services' profits as a referral payment. In addition, it supports the health and well-being industry and promotes repeated participation in these services. It serves not only an economic benefit, but a social one as well, improving the awareness of the extensive resources available to individuals.

Question: What are other methods (besides social entrepreneurship) that can alleviate rising income disparity? (ex: policies, other forms of economic systems, etc)

Source: Lewin, Michael. “Botswana’s Success: Good Governance, Good Policies, and Good Luck.” Chapter 4, 81-90.

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