Tuesday, August 19, 2008

Day 12: Micro Entrepreneurship

Each day I ride to work, I am amazed by the staggering amount of entrepreneurship that surrounds me. Almost everyone seems to be an entrepreneur… the woman selling fruit, the man picking up plastic bottles, the child selling a newspaper. Of course, necessity forces most of these people into the role, unlike their American counterparts whose desire for freedom and financial independence are paramount.

Unfortunately, many of these micro entrepreneurs have little to no business training, resulting in numerous small businesses that are exactly alike. While I certainly believe that microfinance is one of the keys to ending world poverty, I believe that Small and Medium Enterprise (SME) development has more of an impact. I would much prefer to give money to a single entrepreneur who would employ 50 individuals with an innovative business model than give money to 50 micro entrepreneurs who have undifferentiated businesses. Not everyone is made out to be an entrepreneur and I question the prudence of emphasizing unabated entrepreneurship as the answer to poverty alleviation. Working with CJM, I have been confronted with their desire to produce micro entrepreneurs within the community of former gang members, but the reality is that they themselves are not yet ready to be entrepreneurs. Certainly a critical piece of the solution is to give all the potential entrepreneurs the necessary tools to enable them to go about their ventures. I hope that I will be able to do that with the three fledgling businesses that are arising from the grave of the old cooperative.

Joel Montgomery

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1 comment:

Robert Katz said...

Joel, I couldn't agree more. One of my big fears about the small world in which we work - that of "market based solutions to poverty" or "base of the pyramid" or whatever you choose to call it - is that some influential people really believe that everyone is an entrepreneur. Sure, when it is out of necessity, people are entrepreneurial - as you note - but everyone is not a born-and-bred entrepreneur. When someone like Muhammad Yunus says so, though...that's potentially damaging for our work. Just my 2 cents. Thanks for the post - glad to see there's a kindred spirit out there. Rob