Rob Katz

Interview: Randall Kempner Takes the Reins at ANDE

Randall KempnerAs I opened up my interview notes, Francisco pinged me over Skype. His message was simple: I just have a feeling, 2009 is going to be the year of ANDE. This has to be more than a coincidence, I thought. After all, the interview notes I’d just clicked open were from a conversation with Randall Kempner – the incoming Executive Director of the Aspen Network for Development Entrepreneurs (ANDE, for short.) Laughing, I wrote back to Francisco, telling him of his fortuitous timing. He agreed that my interview with Randall was destined to be our first post in 2009.

It’s more than timing; the development through enterprise sector is developing quickly. I predict that the next 12 months will bring more formality and more cross-organization cooperation to our sector, as a range of funders, investors, entrepreneurs, intermediaries and research organizations work to take the base of the pyramid concept and turn it into an investible asset class.

A good first step towards this goal is creating the Aspen Network of Development Entrepreneurs, and hiring its first Executive Director. The Aspen Network is basically a trade association for organizations like Acumen Fund, New Ventures, Agora Partnerships, E+Co, Technoserve, Root Capital and others working to help small and growing businesses take hold in low-income markets (full disclosure: NextBillion’s sponsors, Acumen Fund and New Ventures, are members of ANDE). Before taking his new job, Randall Kempner was Vice President for Regional Innovation at the Council of Competitiveness. He has also worked for the OTF Group and before that, as a consultant with Monitor Group. Randall graduated from the University of Texas at Austin with a M.B.A and an M.P.Aff. He earned his Bachelor’s degree in Government from Harvard University.

In our conversation, we discussed the role of innovation in economic development, how the Houston Astros broke Randall’s heart in 2005, and just about everything in between.

Rob Katz, Who is Randall Kempner?

Randall Kempner, Aspen Network of Development Entrepreneurs: I’m a loud and proud Texan – a fifth generation Galvestonian. My family’s been in Galveston for 130 years and throughout that time, we’ve been dedicated to helping that community grow. My dedication to community development can be traced from that family commitment to it. I knew at an early age – high school – that I wanted to be involved in economic development; my father and grandfather’s civic participation really impacted me. Add into this my interest in Latin America, and you can see how I began my early work with Monitor. How did you become involved in economic development?

Randall Kempner: My first real job was as an intern for the Galveston Economic Development Corporation as a junior in college. When I got out of college, I went to Monitor, specifically because of their country competitiveness practice. At Monitor, I did my first development work in Colombia, with the graphic arts industry in Bogota and Cali – helping companies export short-run printing and pop-up books. Oddly enough, Colombia is the second best country in the world – after Japan – in terms of quality paper engineering – or, at least they were in 1993. At the ripe age of 25, I became the local project manager for Monitor’s national competitiveness project in Peru (1993-1994). After that, I earned a policy and business degree in grad school, focusing on economic development. In 1998, I went back to Monitor to work exclusively on what was then called country competitiveness (doing work in El Salvador, Bermuda, Dominican Republic). From there, I worked with Mike Fairbanks and helped launch the OTF group, which spun out of Monitor in 2000. What does innovation-based economic development mean to you, as an expert?

Randall Kempner: In today’s world, in the developed world and to an extent in emerging markets, the only way to have a sustainable economic strategy is to base it on innovation. It’s not enough to count on pulling raw materials out of the ground or doing low-cost labor. You have to develop products and services that set you apart from other companies and other countries. The innovation can happen anywhere along the value chain. You can’t do basic products anymore and expect to have prosperity – going out to get big companies to build manufacturing plants isn’t working. Economic development needs to be regional, innovation-based and integrated – which means it has to be integrated with your workforce development strategy. The most important piece of capital is human capital. I can’t speak as much about the emerging markets in this regard – but in the United States, workforce development and economic development have been thought of separately in the past. What does innovation-based economic development mean in base of the pyramid context?

Randall Kempner: That’s one of the issues that I am excited to explore in ANDE. It’s increasingly the case that integrated development is important in a BoP context. At the same time, there are real opportunities to extract raw materials in low-income countries, and create value through the extraction. So the challenge is to develop human capital through the process, and use that for the purpose of building more innovation-based economies. What has the base of the pyramid idea and movement meant to you in your work?

Randall Kempner: It clarifies and has brought to light the opportunities that exist to create sustainable economic development. Economic development has focused on serving the upper echelon. The BoP idea says no, you can directly impact people’s lives at the lowest income levels through economic development. It’s a great way to point to another way of doing it. From an ANDE perspective, the idea is to have a rich and flourishing capital/business market along the entire sector so that you can have BoP companies serving BoP customers as the basis – the foundation – of the sector’s growth. What’s the most problematic aspect of the BoP idea?

Randall Kempner: I don’t claim to be an expert in the world of BoP business models – but I am convinced that if we can figure out the right business models, we can make real change. The biggest challenge is finding those models and expanding them. My work has been focused on the United States for the past 5 years. I’m confident that there are relevant models that cross over, but that there are also relevant models that I don’t necessarily know. What’s your biggest priority for your first 6 months at ANDE?

Randall Kempner: Generally, building the organization. We need to turn an incredible network into an actual organization. That means creating products and services that are of real value to members. That means creating organizational structure and processes. That means having really good events that show why someone should be in ANDE. Let’s make this thing a value to those who join. What do you need from the development through enterprise community in order to succeed?

Randall Kempner: First and foremost, Interest in potentially joining ANDE and a willingness to be part of a network that’s sharing good ideas and best practices, that’s going to advocate for a greater development focus on small and growing business. It also means giving guidance to ANDE and it means staying committed to what each organization does. What’s your biggest question for the BoP community?

Randall Kempner: How do we collectively make – and prove – the argument that a focus on the BoP and on small and growing businesses is critical to economic development? I like Development through Enterprise as a commonality – there are people on NextBillion who may not be interested in ANDE, because we are really focused on small and growing business. What are you reading to get ready for ANDE?

Randall Kempner: Dalberg (Global Development Advisors) has done a great job on getting ANDE up and running; they gave me a huge packet. The Necessary Revolution (Peter Senge) and Hot, Flat and Crowded (Thomas Friedman) are also on my list. It is incumbent upon any development organization to understand the environmental impacts of whatever we’re doing. Regardless of whatever you’re doing, you need to care about the environment – period. There is NOT a conflict between economic development and environmental sustainability – there are enough examples out there now that there will be incredible market opportunities for regions that embrace environmental sustainability – they will have the human capital. What is going to be the biggest challenge in your job?

Randall Kempner: Staying focused. There are going to be so many opportunities for partnerships, new initiatives, ways to serve the membership – so it’s going to be a challenge to focus on a few key items and do them well. For 2009, we plan to have a web site and online directory. We’re going to have monthly or bi-monthly investment management discussions between our members who are doing deals. We are going to develop at least 1 training program, probably around orientation training for intermediaries working in the developing world. We have already raised money for a capacity development fund – available only to ANDE members – to help them develop capacity, ideally working together.

Thanks to Randall Kempner for taking the time to speak with me. I hope his first day at ANDE (today) has gone well, and that he’s basking in the glow of a Fiesta Bowl victory by his Texas Longhorns football team last night…it was a close one!