The Solutions journal is a fantastic resource for showcasing bold and innovative ideas for solving the worlds integrated economic, social and ecological challenges. They've just ran an interview with University of Michigan Professor Aneel Karnani on how business and governments can strike a balance in fighting poverty.

"The central issue in reducing poverty is creating jobs. If you ask a poor person, what do you wish for? They say, get me a job. So all our efforts have to focus on creating jobs. The primary engine of job creation is business. There is no magic answer to create jobs, but the starting point is to focus on doing that. Government must create an environment that allows business to thrive—by not having onerous regulation, providing the right infrastructure, the right procedures for getting permits, et cetera. In many countries, government stifles business rather than fosters it"

Aneel has some interesting perspectives on microcredit initiatives, and isn't a supporter - instead he advocates microsavings and microinsurance initiatives as better things to put resources into.

"In the last decade, the emphasis has shifted to free markets on a small level, such as microcredit, led by Grameen Bank in Bangladesh. This idea has spread now, and yet the evidence is that microcredit doesn’t seem to work. So I argue we should stop if it’s not working. The reason it doesn’t work is that microcredit assumes the poor want to be entrepreneurs. Well, the poor are not so different from the rich. In the United States, 90 percent of the workforce chooses to be salaried rather than entrepreneurs. So why would we think all the poor in Africa want to be entrepreneurs? If given a choice, most would prefer to have a salaried job."

"The poor person who wants to be an entrepreneur needs not just money but also training in other business skills, such as accounting and marketing. We need to give them these skills, not just money. I would also like to see the industry shift emphasis from just microcredit to microsavings. The poor need not just loans but also to save money. But they have no mechanism to save money. They have so little, no bank wants to help them. If they keep the money at home, there’s the temptation to spend it, or they worry it will be stolen.

Also useful is microinsurance, for health, accidents, unemployment, or a bad crop. But providing microinsurance is not economically feasible with current technology and business models. I would find ways for microfinance to shift emphasis to microsavings and micro insurance."

For the full interview, point your browsers here.