What is Bottom-Up economic model?

First, let us begin by understanding the term Bottom-Up.

According to the Cambridge Dictionary, bottom-up means; starting at the lowest levels or from the smallest details of an organization, system, plan, etc.

And what’s an Economic model?

An economic model is one particular way of organizing an economy.

In simple terms a bottom-up economic model is an economic system that derives its distribution of resources from the lowest end of a particular corporation, organization, government or a well-organized system to the highest level of the pyramid.

This particular system allows focus on a particular individual as the primary factor in achieving a certain milestone.

Some of these factors may include analysis on specific characteristics and micro attributes of an individual.

The system allows individuals to independently contribute to the growth of a particular corporation, organization or a government through profitable and growth opportunities.

History of the economic model

To many Kenyans, the bottom-up economic model dates back to when Kenya’s Deputy President William Samoei Ruto launched his presidential bid. According to Mr. Ruto, this economic model which serves as his main campaign banner, is rather a blueprint that aims at promoting investments of ordinary Kenyans and empowering them financially which will further help the country to generate more tax revenue to salvage the country’s economy.

Mr. Ruto’s framework and plan of the bottom-up agenda is to inspire and empower the many unemployed Kenyans, the vulnerable, women, youths and the low-earning individuals.

Looking into historical accounts, the bottom-up plan is somewhere in between the Capitalism and Communism belief systems, where wealth has to be divided accordingly to the working people but still retaining a capitalist motive and a precursor of a socialist system.

In the Kenyan scenario, the working people are the hustlers who can still freely venture into private endeavors. In actual sense Mr. Ruto and his allies are trying to employ both systems without upsetting the rich folks.

The difference between Trickle-Down and Bottom-Up economic models

A trickle-down or rather a top-down economy involves the distribution of resources from the highest level of a corporation, organization or government towards the lowest individual within that particular ecosystem.

According to Investopedia Trickle-down economics, or “trickle-down theory,” states that tax breaks and benefits for corporations and the wealthy will trickle down to everyone else. It argues for income and capital gains tax breaks or other financial benefits to large businesses, investors, and entrepreneurs to stimulate economic growth.

This particular system aims at using the most comprehensive factors as a basis for decision making. This involves looking at the bigger picture, where the goal is to look at the general factors as the driving force of the economy.

This ideology has been intensively promoted by Kenya’s opposition leader Raila Odinga, who reiterates that his government will be pumping money from the top to bottom.

On the other hand, as we previously discussed, bottom-up economy is aimed at targeting the lowest individual in a particular system to the highest member of that particular system.

An example of how this model works in our modern society

In late 2019 when the world was hit by the global pandemic, COVID-19, most people thought that the whole world was going to succumb into a total economic collapse due to the massive impact of the pandemic, however, the outcomes were far much different from what many people had anticipated.

Amazon, Inc. for instance, the American corporation’s net profit went up 86% in the aftermath of the 2019 pandemic. This only proved one thing, that it is only those at the lowest end of the pyramid that can foster a particular organization, corporation or system.

Many modern corporations and organizations survive based on this model, if people are not empowered financially, they won’t spend much on these corporations and as a result these corporations will go out of business.

The same way works in a democratic system, the government depends on the taxpayer to ensure it stays afloat and for the taxpayer to pay his/her due taxes he/she needs financial empowerment.

How can it be implemented?

The bottom-up model can be reinforced by both individuals, corporations, organizations and governments. This may include building factories and industrial plants, deploy proper resources and technologies that can be used to bolster local production.

Case Study

Consider the difference between giving KShs 100 Million in aid to Kilifi County for instance and empowering a thousand of its residents to sell their products locally and abroad that allows them to make at least KShs 100,000 each. The second mode of empowerment will have a huge positive impact in revenue generation compared to the first one.

What are the advantages of the Bottom-Up strategy?

The model allows low-earning entrepreneurs to contribute massively to the growth of a nation and at the same time replicate life sustaining projects.

What would be the Impact of the model to Kenyans?

It will be of great good if the bottom-up model is implemented since many jobs will be created and the overall economy will be sustainable even for the low-earning individual.