Thursday, May 28, 2009

Recap on Business Plans from the Slums

“The role of business skill development in catalyzing dynamic economies and alleviating African urban poverty”
Green College, University of British Columbia

Yesterday, I returned to the old stomping ground of my university and business school, Sauder School of Business, to engage in a workshop discussing issues of social entrepreneurship and development in Africa. The workshop was a fundraiser for the Sauder Africa project Social Entrepreneurship 101. I have been following SE101 since 2007 when I first mentioned to Nancy Langton about the wonderful work of the Kimathi Information Centre and their full-spirited leader, Jose Ngunjiri. They continue to be partners in helping to train young entrepreneurs through a business planning course to this day.

I was quite unsure what to expect from the workshop besides listening to some experiences of work in Africa. My uncertainty then turned to a feeling of inspiration – I sat in this room and started to hear the thoughts of Canadians genuinely committed in the issues of development and business both at home and in Africa and beyond. The discussion was extremely engaging between the audience and speakers in trying to capture what makes a successful entrepreneur in the most dire of circumstances. Here is a little bit about the speaker’s discussions and how I related to their work.

Photo (left to right): Nancy, Dale, Stephen, Marcia, Joanna, Rob

Marcia Nozick, Executive Director of Eastside Movement for Business and Economic Renewal Society - EMBERS

Marcia, who has been working in community development since 2001, became involved in EMBERS mainly because she lives in the neighborhood. At the time, she was looking for ways to get involved with the marginalized in what is known as one of the poorest area codes in Canada, the downtown eastside (DTES). EMBERS is basically a business training for those in the DTES who are ready to start their lives fresh as an entrepreneur. She mentions a great deal of support (some for nearly 4-5 years) that is provided for nearly 135 of the new businesses. EMBERS provides a tremendous amount of resources in an attempt to help the businesses succeed such as the financing 3 to 1 program. For example, if the business raises at least $600, the organization matches another $1200 in order for the business to leverage the capital and grow. Of course, these business owners overcome major barriers (some without identification, can’t open bank account, navigating business regulation forms, etc).

It is just hard for me to imagine what Africa could be like if such abundant resources were available to entrepreneurs as they are here in Vancouver. While so geographically apart, many challenges are the same in attempting to develop a business from one’s bare hands.

Dale Albertson, Executive Director of African – Canadian Continuing Education Society

ACCES is simply providing education programs in Kenya. He approached the workshop less about his organization and more about some of the literature that has helped him understand micro-enterprise, mainly quoting work from Development in Practice journal. He asks what is the motivation for creating microenterprises in disadvantaged areas? The motivation is to provide one’s basic needs and dealing with lack of security. Thus in such mindset, most entrepreneurs have no thought as to what activities they wish to pursue. Instead they copy the businesses that are common around their community. Why? The individuals are extremely risk adverse; they are not interested in starting in a venture they know nothing about. The biggest question in their minds is how to make money in the least amount of time given the limited resources. Thus, the businesses gravitate towards those industries that already exist. He also states that less than two percent are products that are differentiated from those that currently exist. His last main point was that those with a vision tended to end with better futures and those with formal training had the better visions.

While I can understand the motivation reason mentioned by Dale, I also wonder whether there is some deeper disruption also taking place that keep people from having a totally new product in their community market. I wonder whether differentiating your product also brings animosity and jealousy to the community which some would rather avoid. I recall my time in Uganda when a farmer mentioned who some of them were attempting to grow a new product, apples as was demonstrated by the extension workers. The problem is that apples are expensive to grow with the cost of all the inputs compared to the other crops, so not all farmers could grow in it the area. Once a few farmers attempted to grow the apples, many would steal the apples or cause harm to the apple growers. Those growing apples had to ban together at night to protect the apples. Now I wonder if someone decided to go against a sign of solidarity (ie growing the same crops, selling the same goods, etc), do they always experience such negative reactions from their communities, thus avoid such confrontation? Such innovators have a tough barrier to overcome if this is true.

Rob Kozak – Researcher for Africa Forests Research Initiative on Conservation and Development - AFRICAD, Professor of Sustainable Business Management, UBC

Rob is a researcher who clearly wants to addresses the linkage between poverty and forestry in Africa through alternative forest tenure business models. He states that 90% of the rural poor are dependent on the forest (either for subsistence, housing, food, medicine, etc). A majority of the forest business utilizes the concession based export model where large tracts of land are sold to multi-national corporations. From such models, little wealth goes back to the communities in the forest and the communities usually have limited rights of land access. He asks the question what could these communities (particularly indigenous communities) do to formalize or legitimize a business in forestry, otherwise move out of the informal sector? He knows that direct finance and subsidies do not work so what is required are interventions with sound business principles. Since most of the small and medium size forest enterprise cannot compete with the MNCs, how can they sell to smaller niches or domestic markets? How do we enable business for these local business persons?

In his talk, he mentions attempting to assist the most marginalized in the forests of Congo, the pygmies. I had the chance to visit a group of pygmies at the edge of the Rwanda / Uganda border as well as those near Bwindi forests (best known for the endangered silverback gorillas). The pygmies have been pushed out of their homes in the forest, some for the reasons of conservation of endangered animal species. The communities were given no exit strategies to help them survive out of their usual hunter-gather societies. The people are extremely impoverished, many treated as unpaid workers on agriculture land (only fed a small meal a day), those disabled are left to beg from home to home or steal small potatoes when they can. It is actually one of the saddest situations to see and ask how they are forced to survive. Rob and his group have a huge weigh on their shoulders to attempt to gain some legitimate rights to land back to these indigenous people.

Joanna Buczkowska – Managing Director for UBC Centre for Sustainability and Social Innovation, Development Advisor for SAWA Global

Joanna mainly spoke from her work with SAWA in showcasing grassroot leaders in 50 of the poorest countries in the world. They are currently looking for innovative ways for these amazing individuals to show case their work (ie. Video) and how to mentor or connect these heroes to each other and the rest of the world. A major criteria that has helped their program to succeed is to ensure that the heroes are active partners in the dialogue of the program. I love the sprinkles of inspiration from their website and have a few names I would love to drop into that program for sure!

Stephen Nairne – Managing Director for Lundin for Africa

Stephen’s organization helps to provide social venture capital to organizations in Africa. They currently are working with eleven projects in nine countries. They attempt to scale businesses in West Africa as well as provide funds for technical assistance. He asks how to get businesses into the formal sector and become taxpayers. The process can take in some areas five to ten years. He mentions their support towards the Acumen Fund which generally invests capital in bottom of the pyramid institutions. I also like his keen interest in the growing area of mobile banking.

Overall, the event was well worth attending and look forward to hearing more about these organizations in the future.

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