March 25

Moses Lee

Entrepreneurship for Survival at the Base of the Pyramid

At the William Davidson Institute, we recently completed the first Goldman Sachs Entrepreneurship Certificate Program in Rwanda, which is part of Goldman Sach’s 10,000 Women Initiative. Goldman Sachs started this program with the overall goals of “increasing the number of underserved women receiving a business and management education and improving the quality and capacity of business and management education around the world.”

Specifically, WDI’s certificate program targeted 30 women entrepreneurs in Rwanda who were either starting or scaling up a business. Though I was not involved in implementing the program, I recently had a chance to sit in on a presentation from one of my colleagues, Sharolyn Arnett, who was heavily involved.

During the presentation, one point that kept coming up was the difference in perspectives on entrepreneurship between people living in developing countries like Rwanda and people living in developed countries like the U.S.

For those of us living in developed countries, the idea of entrepreneurship is very romantic and idealistic. It’s often thought of in the vein of “Making your dreams come true!” and “You can change the world!” I would almost go so far as to say that entrepreneurship as we know it in the developed world is a luxury. (Not that this is bad or anything. This is just the form that entrepreneurship takes in very rich and stable countries.)

Not so in the developing world. The motivation for entrepreneurship in the developing world is often for survival, not business opportunity. An interesting point made in the Global Entrepreneurship Monitor in 2006 was that “early-stage entrepreneurial activity is generally higher in those countries with lower levels of GDP.” Why is this? The report further elaborates that many in the developing world “are pushed into entrepreneurship because all other options for work are either absent or unsatisfactory (necessity entrepreneurs).”

In light of the global recession, we from the developed world are getting a slight glimpse of what entrepreneurship means to people in the developing world like Rwanda. Today, many people across the U.S. are forced into entrepreneurship because they have lost their jobs; entrepreneurship has become a means to pay the bills.

With all this being said, it’s so important that we think about entrepreneurship in the developing world though the correct lens. In a previous post, I mentioned that one of the best things that we from the developed world can do for the poor is help cultivate an entrepreneurial environment for them. To do so, we must first acknowledge that entrepreneurship has a significantly different meaning and purpose in the developing world than in the developed world. By having this correct perspective, we will be able to better support the local entrepreneurial spirit – and ultimately make a greater impact.