The LMR economic model

The LMR economic model: The Limited Monopolistic Reward model can encourge huge investments.

Ramat Gan, Israel
Organization type: 
hybrid
Project Stage:
Idea
Project Summary
Elevator Pitch

Concise Summary: Help us pitch this solution! Provide an explanation within 3-4 short sentences.

The LMR model suggests that if companies are promised to recieve a monopoly license on their products for a known period of time, they could capitalize how much money that license is worth to them, and invest that money today.
If that is used on a country scale, it can revolutionize the country.

WHAT IF - Inspiration: Write one sentence that describes a way that your project dares to ask, "WHAT IF?"

What if we could make developing the poorest countries in the world an excellent investment for corporations?
About Project

Problem: What problem is this project trying to address?

Today coroporations who have the technology to fundamentally improve the life in the poorest countries in the world, have no incentive to do that. It would cost them huge amounts of money, and in the end other companies would enjoy the higher standard of living in the country without making that investments (the free-rider problem). In addition, improving just one sector of the economy would not make the country developed enough to be profitable.

Solution: What is the proposed solution? Please be specific!

The Limited Monopolistic Reward model addresses those two major issues: It is based on a centeral-guided overall solution to all the areas in which the poor counrty needs improvments, such as sanitation, constraction, banking, agriculture, education, etc. To all those areas and many more, we in the west have today companies who know how to it the right way. In every area a global company would be chosen (in a request for tendres) to improve it to a western-level. In return to the huge investments the companies would have to make, they will be granted rights for a monopoly for a predetermined period of time. That time can be decided in advance or (better) be decided by the tender. Companies could evaluate how much money they could make.
Impact: How does it Work

Example: Walk us through a specific example(s) of how this solution makes a difference; include its primary activities.

When a baby is born in Sub-Saharan Africa today, he has a chance of 1 to 11 to die before the age of 5. If he will survive and reach adulthood, he will have about 60% to live from under 2$ per day. It doesn't matter how smart, strong or otherwise talented he is. He is born into a country that can not provide him with the means that we in the west take as granted such as free excess to clean water, education, electricity, real doctors and medicines, or even less critical things like a bank account or a supermarket. Under those circumstances, one can never truley fulfill what he is capable to. At the most he would find a better way to work in the fields. But if he was born into a more developed country, he could achieve much greater goals

Impact: What is the impact of the work to date? Also describe the projected future impact for the coming years.

As the project not been implemented yet, it doesn't have any impact to date. Looking forward, I believe that it is possible to take one of the poorest countries in the world today (for example, I found Mozambique to be an excellent candidate for the project), and within a few years, using mass investments that would include every aspect of living, to make her a truely developing country. One that can achieve high sustainable growth and even attract investments in the free market. Many of the people living today in rural areas of the country just to work in the fields using primitive methods would move into cities (much more developed than those today in the country), and those who would stay in the rural areas would enjoy the technology required to grow crops in western-like efficiency, which could feed the entire country much better. The UN's HDI can be used to track the prograss.

Spread Strategies: Moving forward, what are the main strategies for scaling impact?

The first stage is to establish the body that would organize the program. It should include professional economists, lawyers and so on, and could be under the patronage of the World Bank or not. Then the country/ies to take part in the program is to be chosen, both by potential and by willingness to pass (and enforce) the monopoly-rights laws required. The next stage is to request for tender from international corporations to make investments in that country. It would be the organizing body's rule to choose the best offers for the project, both by terms and viability, and to implement.
Sustainability

Financial Sustainability Plan: What is this solution’s plan to ensure financial sustainability?

At first the budget would have to reach from philanthropy, either by the World Bank or individuals and NGOs inspired by the idea. But when this project reaches the request for tender phase, it could charge a fee for taking part in the tender, and to take a small percentage from the investments made by the winning companies (both must be declared in advence), in order to finance the expenses of the project.

Marketplace: Who else is addressing the problem outlined here? How does the proposed project differ from these approaches?

From what I've seen, this project differs greatly from any other approach to the issue. One can not disagree that the poorest countries in the world have many problems. And many of the projects here and in reality today refer to some of the problems with new products or services. But I haven't seen yet an approach that offers such a complete solution to deal with almost all of the problems at once. I once heard that Bill Gates had an idea called "The Network", who proposed many bussinesses to unit in order to develope a poor country, but it was based on philanthropy, and not capitalism.
Team

Founding Story

Well, I day-dream a lot. Once I saw a National-Geographic program about human hunters in Africa and just started to think to myself how fortunate I am that I don't have to hunt for my dinner, but can just go to the supermarket and buy. And then I thought "So why there aren't any supermarkets there like here?". And I answered that it was because they were too poor. So I questioned again "Why don't they have money like me?". Until I realized that it's a magic circle that sentence them to poverty, and that if we just take them out of the circle and create all of the sudden a richer environment for them, they could live just like us in the west. The idea about monopoly as incentive came later.

Team

I, an MBA graduate of Bussiness Administration, am currentally the only team member. As it is a an economic model and not a physical product, there is no need for other people to share it. Of course as this program becomes more tangible, staff members would be required to organize the details both with companies for the investments and with governmental institutes to grant all the rights to the companies. I can dedicate my entire life to this program.
Background
Please confirm how you heard about the Unilever Awards:

An item in an Israeli bussiness newspaper.

Please confirm your role in the initiative (eg Founder/co-Founder) and your organisational title:

I am the founder of the model.

Which of the 8 UN Global Goals (Sustainable Development Goals) pre-selected for this competition does your solution relate most closely to? [select all that apply]

No Poverty, Decent Work and Economic Growth.

Leadership and the Unilever Awards
Please provide examples of any previous entrepreneurial initiatives you have pioneered.

A few years ago an Israeli soldier was kidnapped alive by the Hamas terror organization, and in return to his release, the Hamas demended the release of thousands of his men, including hundreds of convicted murderers. I thought that such a deal is the worst possible solution to the situation. So I've written a short article (15 pages if I'm not wrong) summarizing all the options to deal with the situation, the pros. and cons. of each option, and even mathematically grading all the options on a weighted scale. I sent it to the decision makers in Israel.
Then I opened a web-site to raise supporters and to explain why we are opposing the discussed deal. However, since the talks about the deal were made away from the media and were spread over years, I didn't know how urgent it was to act and when, so eventually I didn't invest enough time in it to make it really meaningful to the public. And to be honest, I guess I didn't really believe that I could make a difference when it seemed that so much money and media were pulling the other way.

Beyond your existing team, who else are you working with to achieve your objectives, eg partners, advisors, mentors?

Today, as my team consists only of me, I'm not working with others neither. Of course it would be necessary, though, when the program starts moving in the right direction.