Unleash Your Entrepreneurs!
Dec 01, 1999 
Categories: Entrepreneurship
New technologies are opening the door to entrepreneurial opportunities that can benefit developing and developed countries alike.
UNLEASH YOUR ENTREPRENEURS!
Iqbal Z. Quadir
Newsweek
Dec99-Feb2000, Vol. 134, Issue 24
How business can help: New technologies can transform poor nations.
MANY WORLD BUSINESS leaders think addressing widespread and persistent economic poverty around the globe is a matter for governments, development agencies and charities.
In fact, it is an issue central to business, more so now than ever.
Successful businesses realize that the broader the base of talented workers and prosperous consumers, the greater their own rewards. Henry Ford made cars cheaper so that lower-income people could afford them. Muhammad Yunus founded Grameen Bank in Bangladesh to make loans to poor people to start tiny businesses. Similar opportunities exist today worldwide. New computing and communications technologies offer an unprecedented chance to create vast new markets while lifting billions out of poverty.
Why has poverty persisted for so long? Partly because the 20th century has not always been friendly to entrepreneurs. Many nations adopted command economies outright. Others exploited the coldwar rivalry for payoffs, or simply stressed the supposed virtues of central planning. Aid from rich countries to poor ones aided inefficient economic systems, deepening poverty and stagnation--which then "justified" yet more state intervention and foreign aid. Almost everywhere, the idea grew that "development" was somehow distinct from establishing a healthy environment for business. Yet a crucial part of poverty eradication is the creation of wealth, which is best left to entrepreneurs and businesses; a good business climate translates into development. Moreover, the establishment of a large class of entrepreneurs--as opposed to an entrenched group of oligopolies--contributes to accountability, transparency and the rule of law.
That is how today's rich countries started building their economies, and it is the recipe that poor ones should follow.
The developing world needs to unleash its entrepreneurs. One effective strategy has been
microcredit programs, such as those of Grameen Bank and its imitators. Additionally, American- style venture capital can fund joint ventures between companies in rich countries and entrepreneurs in poor ones. A German automobile manufacturer, for example, can easily set up joint-venture fabricators in Pakistan, the Philippines and Peru, and, in so doing, reduce costs and diversify risks. The viability of such venture- capital funds and joint ventures has been greatly enhanced by advances in new technologies. Near-zero costs in computing and communications profoundly alter the means of connecting, automating,tracking, analyzing, organizing and, most important, learning. People in rich and poor countries can now collaborate in real time. The relentless price declines in new technologies make them affordable to small entrepreneurs. And the equally relentless increase in processing power allows big entities to track the work of small entrepreneurs from far away. An indigenous woman in Brazil, for example, can use a handheld electronic device to collect data on the Amazon and sell the information to a firm in Rio. It is in
the empowerment of small entrepreneurs where new technologies will make their biggest
contribution to the long-run economic progress of all.
Why should business leaders in the rich world rush to join such ventures? Simple: because, as Henry Ford understood, expanding markets are good for everyone. A similar lesson emerges from the recent history of South Africa--a nation that is a smaller version of our world, with a rich minority and poor majority sharing the same territory. Because some farsighted business leaders in South Africa recognized that a divided nation would never be prosperous, they took bold steps to reduce economic and racial inequalities. Such initiatives have fed through to new investment and more business start-ups. The crucial poverty in the world today is one of imagination. If they imitate the heroes of an earlier phase of industrialization--and capitalize on high technologies-today's business leaders can change the world.
QUADIR is cofounder of GrameenPhone Ltd.
