The Prosperity Paradox

It really is possible to define a path which can break down poverty, but first of all it is necessary to understand what creates it and then to begin to think differently. The charity initiatives aimed at reducing the most evident signs of poverty (defined as push strategies), such as the building of wells in areas without water or of roads to improve transport, do not create long term prosperity because they are often types of infrastructure that are not yet needed and not sustainable in the current markets of a given country. Prosperity is a relatively recent phenomenon for many countries (such as China or South Korea), and by prosperity we mean the process through which more and more people in an area reach a higher level of social, political and economic well-being. Some countries can be considered rich because, for example, they have many primary resources, but they are not prosperous because prosperity is generated by an increase in social, political and economic freedom and so it doesn’t only depend on the resources available in a country. And this is the prosperity paradox: research in most countries has shown that long term prosperity is not achieved by reducing poverty, but by investing in innovations that create new markets (destructive innovation). These innovations work as catalysts to kick start sustainable economic development.