With support from governments and development organizations, crowdfunding could become a useful tool in the developing world as well. Crowdfunding is still largely a developed-world phenomenon but its potential to stimulate innovation and create jobs in the developing world has not gone unnoticed. Substantial reservoirs of entrepreneurial talent, activity, and capital lay dormant in many emerging economies, even as traditional attitudes toward risk, entrepreneurship, and finance stifle potential economic growth and innovation. Developing economies have the potential to drive growth by employing crowdfunding to leapfrog the traditional capital market structures and financial regulatory regimes of the developed world.
While many developing economies may have the potential to capitalize on this new funding mechanism, those that wish to implement crowdfunding ecosystems need to
learn from the initial developed world experience to understand how crowdfunding functions, the “light touch” role that government and regulation should play, and the technological infrastructure requirements involved. Developing countries that manage this process successfully may be able to leapfrog the developed world, in both a regulatory and economic sense, by creating frameworks for early-stage finance that facilitate entrepreneurship, the fostering of innovative technology enterprises and the emergence of new competitive industries.
World Bank Crowdfunding Infographic
The seed of opportunity for the developing world may sprout faster with the help of crowdfunding. This infographic gives a basic overview of crowdfunding and why it could be a powerful tool for the develpping world. It covers the 4 main types of crowdfunding. How equity-baesd crowdfunding works? Current market size. Proof it works in developed countries and projects for potential use in developing countries. Why it works in developing countries. The market potential. Leapfrogging and how we need a constellation of trust for it to flourish. Click on the image to the right to see the full infographic.
Self Assessment Tool – Is Your Country Ready for Crowdfunding?
This is a high-level self-assessment tool that can provide help in assessing a country’s readiness for crowdfunding. This is one possible tool to gauge cultural perception from individuals regarding key factors identified as important in the applicability of crowdfunding within a culture or country. This tool is currently in its validation phase and will be updated as more data becomes available. While individuals can complete the self-assessment to gauge their own perceptions, it is suggested that more than 20 market participants/actors including policy makters, NGOs, investors, and entrepreneurs complete the self-assessment to gain a wider range of option. The report is free of charge. More detailed information about how individual countries rank can be acquired by contacting email@example.com. Click on the image to the left to take the self-assessment now.