THE TRANSFORMATIVE POWER OF BOTTUM-UP INNOVATION

THE TRANSFORMATIVE POWER OF BOTTUM-UP INNOVATION

It is impossible to discuss technological innovations without adopting a forward looking mindset; the term “innovation” itself can at times be seen as synonymous to “modernization” or “progress.” So it stands to reason that when called upon to envision a thriving innovation ecosystem, the favelas of Brazil would not be the first place that would come to mind. 

While traditionally innovation has been viewed in a top-down manner – coming out of spaces of abundance; environments benefiting from university resources and government investment – more and more we are seeing the impact of innovations that originate from the bottom-up. These innovations come from a space of necessity – when people lack the resources to provide for their day to day needs, they have no choice but to rely on creativity and human innovation. 

It is from this environment in the favelas of Rio de Janeiro that Banco Maré emerged. 

Nearly 50% of all economically active Brazilians do not have bank accounts – of the over 50 million unbanked people in Brazil, 1/5 of them live in favelas. These communities have been hugely ignored by traditional financial institutions, and often have to travel long distances to access financial services and complete even the simplest transactions. 

In Complexo da Maré, the neighborhood where Banco Maré was founded – there are more than 200,000 residents but no bank branches, ATMs or lottery shops. In this vacuum, there was a need for local innovation.

Banco Maré, with its motto “A Simple Bank for a Simple Life,” offers both a physical presence in the favelas through local service centers and an accessible financial services platform accessed through a mobile app. Through the app, users can pay bills, buy goods and services from local stores, make peer-to-peer transfers, and view account statements. 

For the first time, members of these underrepresented communities had access to financial services without credit analysis, consultation of debtor registries and other forms of financial exclusion. Banco Maré has even developed its own cryptocurrency called Palafita, and partnered with a local financial services cooperative to set up kiosks around the favelas where resident could convert currency to Palafita credits, which is also accepted by traders/businesses. 

Without bank accounts, residents were excluded from access to digital currency, but with the introduction of Palafita credits, and the ability to conduct digital transactions withBanco Maré, residents have access to the financial services infrastructure needed to invest in businesses and build their local economies – and the benefits have been felt across the favelas. 

The expansion of access to digital capital has also enabled new digital-based start-ups to flourish, such as local ridesharing apps. Existing businesses have also benefitted – there has even been a decrease in once frequent storefront robberies as businesses have begun to digitize their finances. 

In 2018 Banco Maré was awarded a $100K grant from Global Fintech Accelerator Catalyst Fund for their work in spurring financial inclusion in the emerging Brazilian market. Banco Maré is just one example of how human innovation and entrepreneurship will rise up to fill in areas of economic need. When the existing financial institutions were not serving them, Brazilians in the favelas were driven to innovate and create new start-ups and technologies that would fulfill their needs; and in turn drive more innovation in other sectors of their communities.

Humanity at its core has always been innovative; we have always looked towards the future and sought to modernize and improve the quality of life in our society. The fintech revolution taking places in the favelas of Brazil is a testament to the resiliency of human innovation, and shows just how much innovation potential lies within people who don’t have access to the resources and opportunities afforded by university supported innovation ecosystems. 

When people have the opportunity to innovate, they in turn create more opportunities for others – innovation begets innovation. In order to fully optimize innovation capacity on a regional, national and global level, it’s crucial that alternative venues for innovation be explored and supported; and the people innovating in those spaces offered the opportunity to expand beyond their horizons. 

Author details:

Dr. Marcelo Augusto de Felippes is the CEO of Airship do Brasil, a premier manufacturer of aircrafts using lighter than air technology in Latin America. Dr. Felippes also serves as CEO of Logistics International Associates (LIA), Special Adviser to the Secretary General of the Inter-American Chamber of Transportation (CIT), and has previously worked as a management consultant for major events including the 2011 Military World Games in Rio de Janeiro.

A retired Colonel in the Brazilian Army, Dr. Felippes spent much of his life in the Amazon jungle, working as a transportation, logistics, and aviation specialist, working on projects including administrative management of supplies, air transportation, flight equipment and special aviation services.

Throughout his career Dr. Felippes has written an array of books, patents and technical articles that have been published in journals and periodicals throughout Europe and the Americas. He is a visiting Professor at the Catholic University of Brasilia (UCB), and serves as an advisor for Brazil’s first MBA program in Logistics and Transportation. He is also the Latin American Coordinator for the CELTEM, CABEM, CISMEM and HESTRAM Programs at the University of Miami – Coral Gables. He is invited professor at Brasilia Catholic University – UnB and at George Washington University – GWU, Washington DC, USA.

Dr. Felippes earned his undergraduate degree at the Agulhas Negras Military Academy, with postgraduate degrees from the Brazilian Army Command and Staff School and from Research Institutes in Brazil and Venezuela, where he received his Master's and Ph.D. He speaks English, Spanish, French and Portuguese, as well as some Russian, German and Italian.

In addition to his academic and military careers, Dr. Felippes is an accomplished Fencer, having taken part in Fencing Master Programs in Italy, Switzerland, Germany and France.