Susan Davis

Enabling Entrepreneurial Ecosystems

An aspiring entrepreneur in Uganda has an uphill climb. A landlocked country,
Uganda is hemmed in by areas where conflicts break out sporadically, 包括
South Sudan and the Nord-Kivu province of the Democratic Republic of the
Congo. 而且, the country still lives under the shadow of former president Idi
Amin, whose policies included not only torture and hundreds of thousands of
extra-judicial killings, 但是也, 在 1972, the wholesale expulsion of tens of thou-
sands of ethnic South Asians. Locally born and raised, this group had constituted
much of the country’s merchant and entrepreneurial class.

When a team of Bangladeshis led by Ariful Islam arrived in 2005 to set up a
local operation for BRAC, a global development organization based in Dhaka, 他们
had a long and difficult road ahead of them. The organization had already pio-
neered speedy scale-ups in difficult terrain, including in Afghanistan in 2002,
where it began its first operation outside Bangladesh, providing development assis-
tance with programs in health care, 小额信贷, rural livelihood development,
and girls’ education. 尽管如此, Uganda’s historical legacy with people of South
Asian origin working within its borders would present unavoidable cultural hur-
dles.

Six years later, BRAC Uganda’s success has been remarkable. By most measur-
able standards the largest nongovernmental organization in the world, BRAC is
also the largest in Uganda. As of March 2012, it has over 110,000 microfinance bor-
rowers and a cumulative loan disbursement of $116 million in Uganda, thanks largely to a partnership with The MasterCard Foundation, a private, 多伦多- based foundation launched in 2006 with a gift from MasterCard Worldwide at the time of its initial public offering. The partnership with BRAC was one of the first major projects of the foundation, which was created to test and scale innovative poverty solutions with a focus on youth learning and microfinance. Begun in 2008, the partnership with The MasterCard Foundation has helped BRAC increase its reach from 60,000 Ugandans in 2006 到 2.8 million today, a number projected to reach 4.2 百万, 或者 12 percent of the country’s population, 经过 2016. The obvious question is how the partnership accomplished this growth. It is due in part to a strategy to multiply the impact of microfinance by combining it with livelihood development and youth empowerment. The result of the program Susan Davis is the President and CEO of BRAC USA. © 2012 Susan Davis innovations / 体积 7, 数字 2 3 从http下载的://direct.mit.edu/itgg/article-pdf/7/2/3/704900/inov_a_00122.pdf by guest on 08 九月 2023 Susan Davis is a job-creation machine that relies not only on wage employment—although, 和 1,960 雇员, that in itself is substantial—but also on fostering entrepre- neurship. The goal is to lower the barriers to entrepreneurship by touching multi- ple points in the respective value chains of the agriculture, poultry, livestock, and health-care sectors. The education and empowerment of adolescent girls are also key aims, as is the economic empowerment of women, who constitute the vast majority of BRAC-trained entrepreneurs. The interventions include BRAC’s own social enterprise, a nonprofit business that mirrors the organization’s success in Bangladesh, where it runs 18 social enterprises In short, BRAC Uganda has created an entrepreneurial ecosystem in which employment for the poor is created from the bottom up. This has proven to be a more viable strategy than waiting for jobs that may never come from large enter- 采取, 工厂, and direct foreign investment. Working with The MasterCard Foundation, BRAC has created this ecosystem by building on and adapting prac- tices developed over four decades in Bangladesh. The results so far suggest that, given a chance to do so, the poor in developing countries—a group that is dispro- portionately either young, 女性, or both—will not hesitate to seize the advan- tages provided by an environment that is conducive to entrepreneurship. As the examples below will show, BRAC’s experience is that free markets often exclude the poor and marginalized from economic systems. 最终, when the poor lack so much as the opportunity to take control of their lives, society as a whole is worse off. We cannot afford to wait and see whether or not free markets left to their own devices will ultimately create these opportunities. Upfront invest- ment is needed due to the urgency of the global poverty problem. BRAC’s approach to creating entrepreneurship shows how nonprofits can catalyze change at the local level by using a complex set of measures that ultimately smooth the inefficiencies that work against the poor. In short, where free markets conspire against the poor and raise barriers to their success, BRAC tweaks the knobs with interventions that help the poor—a convergence of lower costs, better options, and a greater understanding of rights that offer a fairer deal to society’s most vulnera- 布莱. RISE OF THE MICROFRANCHISES Sarah Mukama is a smallholder farmer from the village of Mawuba in eastern Uganda, close to the shore of Lake Victoria. She supports a family of seven by rear- ing livestock and growing beans and vegetables on a small plot of land. Sarah’s experience provides an example of how BRAC and The MasterCard Foundation are replicating 40 years of success fighting poverty in Bangladesh by adapting BRAC’s job-creation tactics to the Ugandan context. Thanks to BRAC, Sarah now earns part of her income by distributing high-yield seed varieties for maize, 豆子, and vegetables to other farmers in her village and the surrounding areas. She gets a regular supply of high-quality seeds for her own use, but she also fills a gap in the market by offering her neighbors doorstep access to much needed, high-quality 4 创新 / Entrepreneurial Ecosystems Downloaded from http://direct.mit.edu/itgg/article-pdf/7/2/3/704900/inov_a_00122.pdf by guest on 08 九月 2023 Enabling Entrepreneurial Ecosystems agricultural inputs and other affordable goods and services. BRAC’s assistance includes both livelihood training and microloans to help Sarah start a business, but the hard work, and the fruits of it, are hers alone. Instead of charging a fee for her training, BRAC only insists that she offer her own neighbors free advice on more efficient farming techniques. Sarah’s story is remarkable, not only because of the changes in her life— although she talks excitedly about being able educate her daughter in the best school in the district—but for the example she sets for other farmers in her village. With a small amount of help from BRAC, she saw her farm yield increase three- fold. Amazed at this success, other farmers in the village soon came to Sarah for training and to buy seeds. In villages like Mawuba, the transformation is visible. Farmers in areas where BRAC has intervened have reported that their yields are doubling and sometimes even tripling as a result of the inputs and advice provid- ed by these entrepreneurs. 此外, boosting agricultural yields has a ripple effect on poor communities, as it creates increased wealth that catalyzes demand and increases purchasing power in a way that benefits everybody, from tomato vendors to seamstresses, beauticians, and shopkeepers. Sarah is part of a larger ecosystem, a network of likeminded people from poor communities who are driven to help both their neighbors and themselves. 关于 5,000 BRAC-trained microentrepreneurs like Sarah currently work in Uganda. Each is an independent enterprise; BRAC does not pay them wages or salaries, but it does give them the opportunity to make money on their own by reselling goods at a small markup. These entrepreneurs are, essentially, one-person social enter- prises whose activities serve a dual purpose: they generate income, and they also reduce the barriers others face on the path out of poverty. Sarah’s customers are rural farmers who have not been served by existing dis- tribution systems. Similar networks provide cattle insemination and distribute chicken vaccines. The latter has been a critical improvement, for at the time BRAC entered Uganda, chicken mortality stood out as one of the biggest problems facing local poultry farmers. 关于 35 percent of Uganda’s chickens succumbed to dis- ease before laying a single egg, which hobbles the sector and limits the effective- ness of the microloans made to these farmers. BRAC responded by creating and then scaling up a network of microfranchised chicken inoculators. So far, these self-employed inoculators have delivered 13 million doses of vaccine in a bid to bring the chicken mortality rate down to the level achieved in Bangladesh, current- ly about 10 百分, thanks in part to the efforts of BRAC and other private, NGO, and state actors. The vaccinations not only raised the yields of chicken farmers but led to higher repayment rates for microborrowers working with poultry, which allowed BRAC to redeploy capital that much faster. 当然, it is not enough to train Sarah and others like her to buy and sell goods. They already know how to do that. For this model to work, Sarah has to be able to buy her seeds at a price low enough to earn a profit on resale margins. 此外, if the system is to avoid dependence on external subsidies that might not be there for the long haul, the producer at least has to break even. That is why innovations / 体积 7, 数字 2 5 从http下载的://direct.mit.edu/itgg/article-pdf/7/2/3/704900/inov_a_00122.pdf by guest on 08 九月 2023 Susan Davis BRAC’s end-to-end value chain approach includes, in addition to Sarah’s doorstep seed distribution, a system of mass production. BRAC Uganda, 例如, set up its own seed production and processing enterprise early in 2011. The seed produc- tion unit reduces the unit cost of high-yield seeds by engaging a network of con- tract growers and leveraging a low-cost, community-based distribution network built on top of BRAC’s microfinance network. The production facility is expected to break even in mid-2013. BRAC’s approach uses economies of scale to its advantage, establishing prices that allow these systems to pay for themselves. BRAC’s approach uses economies of scale to its advantage, establishing prices that allow these systems to pay for themselves. The organization’s businesslike approach has allowed it to hit a sweet spot that makes prices fair for everybody in the value chain, from producer to end user— something that market mechanisms driven purely by profit have failed to do. This impetus for scale also explains the dual rea- soning behind BRAC Uganda’s rapid growth plan for the 10-year period that started in 2006. There is the obvious imper- ative for the organization to grow quickly so it can allay the urgent needs of the poor by reaching as many people as possible, but easily overlooked, at least in the nonprofit sector, is the cost benefit of operating at scale. Doing so passes savings onto other actors in the value chain, who are main- ly poor and disadvantaged women. BRAC has to operate like any large business that is expanding rapidly and com- peting on price. It streamlines its operations; it routinizes its processes by remov- ing unnecessary steps or “trimming the fat” where possible; and it minimizes waste and inefficiency—for example, by taking a zero-tolerance stance on corruption in its ranks. All of this works in the service of a bottom line that is not financial return but social good. The agricultural services BRAC provides now reach 75,000 Ugandan farmers, a number expected to double by 2014. It is rare that agricultur- al interventions in sub-Saharan Africa are able to bridge the last mile to poor com- munities so effectively. BRAC is now working in 10 国家, often in remote, hard-to-reach areas that have barely functioning economies, using a practical low- tech approach to serving a clientele long neglected by profit-driven enterprises. The grassroots distribution model described above has its origins in Bangladesh’s system of community health promoters, or shasthya shebikas in Bengali, which is the core of BRAC’s approach to providing low-cost health care. The shasthya shebika is a self-employed woman who, after receiving training from BRAC, goes door to door in the villages and slums of Bangladesh—much like direct sales models for Tupperware and cosmetics in the U.S.—with a basket of simple but vital goods and services, such as vitamins, sanitary napkins, anti-malar- ial pills, sterile bandages, and condoms, all offered at affordable prices. She also 6 创新 / Entrepreneurial Ecosystems Downloaded from http://direct.mit.edu/itgg/article-pdf/7/2/3/704900/inov_a_00122.pdf by guest on 08 九月 2023 Enabling Entrepreneurial Ecosystems inquires about her neighbors’ health needs—for instance, about a persistent cough and fever that may suggest a case of tuberculosis. The media have dubbed the shasthya shebikas an “army of housewives,” for they now number 91,000 in Bangladesh alone. They are able to generate extra income from the sale of the items described due to BRAC’s training and provision of low-cost supplies, some of which, like the Ugandan seeds, are manufactured by BRAC. The academic literature has dubbed BRAC’s approach “microfranchising” in recent years. It cites such examples such as Fan Milk in Ghana, which has become the second-largest consumer goods company traded on the country’s stock exchange, thanks largely to the efforts of its bicycle-based retailers who are ubiqui- tous in Ghana, pedaling the streets with their own mobile freezers; Ruma in Indonesia, which was established to put poor woman into business as retailers of mobile phone air time, offering business start-up kits to those living on less than $2.50 a day; VisionSpring, founded by optometrist Jordan Kassalow, which uses a
microfranchised network to distribute glasses to the poor in India, Bangladesh (在
partnership with BRAC), El Salvador, and South Africa; and LivingGoods, 哪个
got its start through a partnership with BRAC Uganda’s community health pro-
moter program and now aims to offer others a microfranchised system of health
care distribution in Africa.

Some have called this a “business in a box” approach to job creation. 虽然
BRAC did not call its efforts either microfranchising or business in a box when it
began to experiment with this distribution model in the 1980s, all of these enter-
prises are following a path pioneered by BRAC in Bangladesh. BRAC’s microfran-
chising is now at work in multiple countries in an array of areas, and its efforts are
always geared toward providing a vital social benefit not provided by existing mar-
ket solutions. It is part of a larger set of interventions that reaches across entire val-
ues chains in diverse sectors, such as poultry, silk manufacture, and handicrafts,
creating an estimated nine million jobs in Bangladesh alone.

ENTREPRENEURS IN THE CLASSROOM

Creating entrepreneurial ecosystems begins at a much more basic level than chick-
en inoculations and seed distribution. When BRAC first arrived in Uganda, 它
found much of the country, especially in the north, still recovering from the 20-
year conflict between the government and Joseph Kony’s rebel Lord’s Resistance
Army, which displaced an estimated 1.5 million people. Using rented houses in
remote areas, BRAC partnered with the government to create a Ugandan version
of the nonformal primary education model it established in Bangladesh—essen-
tially a “second chance” learning center for disadvantaged children who had been
denied an opportunity for formal education in a government school, whether due
to poverty, 暴力, 或两者.

The BRAC education model acts as a bridge to formal state schooling. 使用
government-approved curricula, the model emphasizes life-skills training to help
build self-esteem in children who dropped out of school or who might never have

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Susan Davis

set foot in a classroom before, with the aim of awakening their curiosity and incul-
cating in them a joy of learning—all of which are the building blocks of entrepre-
neurship. In countries like Uganda, financial education and life skills, 哪个
include social and emotional learning, are the keys to successfully navigating the
transition from adolescence to adulthood.

These learning centers effectively provide a feeder system for entrepreneurship
among the poor. In post-colonial Africa and much of the developing world, tradi-
tional models of education have proven to be an inadequate tool for fostering
改变, partly because poor people find too much of what schools teach to be irrel-
埃万特. Schoolwork becomes drudgery, not joy, and education ends up alienating
the poor from their environment rather than encouraging people to create new
opportunities for themselves. BRAC’s nonformal primary education model takes a
different philosophical approach. It treats the children of day laborers and rick-
shaw drivers as assets, not liabilities; not just as future job seekers but as potential
job creators.

Uganda is faced with the challenge of being the country with the lowest medi-
an age of any nation on earth. Its bulging youth population, especially girls, is bur-
dened with multiple vulnerabilities. Some research suggests that a majority of ado-
lescent girls in Uganda have engaged in sexual intercourse in exchange for money
or gifts at least once in their lives.1 In 2008, BRAC responded to a perceived need
for “safe spaces” for this group by setting up a chain of girls’ clubs under the name
Empowerment and Livelihood for Adolescents (ELA), which has already had a sta-
tistically significant impact on rates of teen pregnancy and condom use by teenage
girls. An unpublished random control trial shows that, over a two-year period
among a group of girls where pregnancy rates are in the range of 10 到 12 百分,
pregnancy rates were about 2.5 percentage points lower in villages with an ELA
program than for a control sample from another village that did not have a pro-
公克. The intervention sample included girls in the village who did not even take
part in the program, suggesting a significant spillover effect of healthy learning.

Encouraging condom use and creating safe spaces for girls may seem a long
way from creating entrepreneurship, but according to BRAC’s holistic approach to
reducing poverty, all these elements are part of the same package. Staying in school
and seizing control of one’s reproductive health are the starting points for building
a class of entrepreneurs at the base of the economic pyramid. 实际上, BRAC’s ELA
program makes the link explicit: in addition to frank discussions of topics such as
sex and contraception, the clubs offer financial literacy and livelihood training as
part of the empowerment package, including training to develop the skills needed
to spot business opportunities when they arise. As the girls grow older, they may
receive livelihood training for their chosen profession, take out a microloan, 或者
start a microfranchise.

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Enabling Entrepreneurial Ecosystems

BRINGING DOWN BARRIERS

It is worth taking a step back to examine from a more philosophical perspective
just what brings these diverse activities together under the umbrella of entrepre-
neurship creation. The answer is that each of them, 以各种方式, deals with bar-
riers to what, for lack of a better word, might be deemed “success” in one’s life—
那是, the freedom to lead the life one wants. This includes the freedom to be a
self-employed and self-empowered economic actor, which is especially important
in places where wage employment is scarce. In Development as Freedom, Amartya
Sen writes of “poverty as capability deprivation,” arguing that

there is a strong case for judging individual advantage in terms of the
capabilities that a person has, 那是, the substantive freedoms he or she
enjoys to lead the kind of life he or she has reason to value. In this per-
观望的, poverty must be seen as the deprivation of basic capabilities
rather than merely as lowness of incomes, which is the standard criteri-
on of identification of poverty.2

BRAC sees the poor, and disadvantaged youth in particular, in terms of the capa-
bilities and freedoms their circumstances have deprived them of. They are consid-
ered diamonds in the rough, potential entrepreneurs with untapped talents and
latent capabilities that are only waiting to break through the many barriers that
keep them from achieving their potential.

传统上, education has been seen as a way of giving people the capabili-
ties they need to survive. In the traditional view, students’ minds are seen as reser-
voirs to be filled with the knowledge and skills necessary to allow their true poten-
tial to flow. Development practitioners should instead view “the reservoir” as
already full and focus instead on the many barriers that stand in the way of suc-
过程. Young people dealing with violence, displacement, and poverty have innate
capabilities that can be tapped, not taught; we need to view them as assets on the
social balance sheet rather than liabilities. Tapping this potential can happen in
many ways, but as we have seen, they are by no means limited to a classroom edu-
阳离子.

One can view microfinance, microfranchising, pro-poor value-chain interven-
系统蒸发散, 卫生保健, 教育, social enterprises, and girls’ empowerment through a
single lens: one of bringing down barriers to entrepreneurship. This lens can also
reframe the ongoing debate about the efficacy of microfinance as a way to fight
poverty.3 One should not view microfinance as a stand-alone tactic to fight pover-
ty—which, as Sen points out, has already been too narrowly defined as “lowness of
income”—but as an essential tool for providing opportunities and reducing the
barriers that prevent the poor from exercising their capabilities.

And these barriers are many. One is lack of capital; 其他, less obvious, 是
exposure to risk. In normal market environments, the poor do not make ideal
entrepreneurs because they cannot afford to take the same risks as those with cash
in the bank or other means of sustaining themselves. Getting food on the table

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Susan Davis

takes priority over gambling on a venture that may or may not succeed.
Microfranchising, a “business in a box,” is a developmental tool that lowers the risk
barrier by using business models that others in similar circumstances have already
经测试.

A lack of adequate health care is another barrier, as frequent illness reduces
people’s ability to work and keeps children out of the classroom, thus continuing
the cycle of poverty. Even for those who remain healthy, lack of access to school-
ing—or, as we have seen, a lack of access to the kind of schooling that inculcates a
joy of learning—is often an obstacle to an individual’s economic and social growth,
which includes the potential for becoming an entrepreneur. Another still is the
anti-poor bias of free markets in places with poor infrastructure. In village envi-
罗蒙兹, monopolistic practices by the sellers hold sway when the poor lack the
means to compare goods, 服务, and prices from multiple vendors, due to a lack
of cost-effective transport options.

Each one of BRAC’s interventions seeks to break down a barrier but, taken as
a whole, they represent a powerful combination that fosters a culture of entrepre-
neurship at the base of the economic pyramid. These tools are often viewed as ways
to amplify or multiply the effectiveness of microloans, which is why BRAC and
The MasterCard Foundation have called their rapid scale-up in Uganda “microfi-
nance multiplied.”

We often read and speak of interventions that “distort” free markets, but these
examples show how, left to their own devices, markets can often distort themselves
in ways that work against poor and otherwise marginalized populations, thus cre-
ating barriers to entrepreneurship. It is the task of the poor themselves to step over
these barriers, but development organizations, working at scale, can at least make
them surmountable.

最后, these barriers can make it difficult to weave the fabric of a society that
allows all people, regardless of the circumstances of their birth, the opportunity to
climb the economic ladder through hard work. The core of the BRAC philosophy
is that talent is scattered evenly at birth; opportunity is not. Violence and poverty
have long deprived too many Ugandans of opportunity, keeping them waiting in
vain for jobs that may never arrive, the barriers to building their own livelihoods
too high and too numerous to surmount. But for the next generation of the world’s
youngest nation, the wait may be over, if the right type of market interventions can
bring out their latent talent and foster bottom-up entrepreneurship.

1. Ann Moore, Ann E. Biddlecom, and Eliya Zulu. “Prevalence and Meanings of Exchange of Money
for Sex in Unmarried Adolescent Sexual Relationships in Sub-Saharan Africa.” African Journal of
Reproductive Health, 11, 不. 3 (2007): 44-61; J. Kinsman., S. Nyanzi, 右. Pool. “Socialising
Influences and the Value of Sex: the Experience of Adolescent School Girls in Rural Masaka,
Uganda.” Culture, Health and Sexuality 2, 不. 1 (2000): 151-166.

2. Amartya Sen, Development as Freedom. 牛津, England: 牛津大学出版社, 1999.
3. David Roodman, Due Diligence: An Impertinent Inquiry into Microfinance. 华盛顿, 直流:

Center for Global Development, 2011.

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