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Entrepreneurial Ecosystems and Sustainable Development

8/29/2014

1 Comment

 
I was recently approached by a young African entrepreneur who was seeking advice from me and several others about how to build an entrepreneurial ecosystem in his home country.  We both agreed that a dynamic entrepreneurial ecosystem is the sina quo non for sustainable development. Without it, none of the other official aid programs stand a realistic chance of generating long term, inclusive prosperity or having a transformative impact on the economy and society.  We also agreed that building an entrepreneurial ecosystem should be a broad-based inclusive process – one that includes, to the greatest extent possible, university students and other members of the millennial generation; members of the Diaspora and expatriates who can combine familiarity with local customs and business conditions with knowledge of international technology, finance and business practices; experienced business executives from local companies and multinational corporations; members of the financial community; and a broad swathe of local residents and the public at-large.  

But then I asked, “What kind of companies are we trying to nurture in this entrepreneurial ecosystem and what are we trying to accomplish with this ecosystem?”  

Start Up weekends, boot camps, and accelerators have perfected many of the techniques for nurturing entrepreneurial start-ups. But these efforts generally focus on "asset lite" companies devoted to app development, ecommerce, gaming, social media, etc.  Of course, there are also large numbers of development-oriented app developers emerging from hackathons and elsewhere who are working in such important fields as mobile money platforms for Diaspora remittances, telemedicine and remote diagnostics, disaster mapping, crowd sourcing reports of corruption and other manifestations of bad governance, and providing marketing and crop management information to local farmers, to name just a few.  But these efforts too generally depend on asset-lite companies.  

As useful and/or profitable as these services may be, entrepreneurial ecosystems that support these endeavors do not address such basic development needs as electricity for all, the provision of clean drinking water, food processing, and the provision of other essential services. The challenge for ecosystem builders in emerging markets, I believe, is to apply the lessons generated from start up weekends, bootcamps, and accelerators to these more asset-intensive activities. Put slightly differently, how can we take the lessons learned from start-up weekends and accelerators to develop entrepreneurial ecosystems that can build reliable businesses around the technologies featured in the Global Solutions Summit and the work of the Global Technology Deployment Initiative (GTDI). 

None of these technologies were developed with emerging market customers in mind.  Quite a few, in fact, were developed for the US military which needs new ways of generating off grid renewable energy and clean drinking water for its forward operating bases.  But many of these same technologies have large and rapidly growing potential markets in emerging markets.  Unfortunately, the entrepreneurs who developed these technologies know how to sell to the US Department of Defense or other governmental entities.  They do not know how to sell to emerging market customers, even though they acknowledge that this is a new and potentially lucrative source of business. 

To help the technology deployment process operate more smoothly, these technology companies need reliable local partners who can (i) incorporate these proven technological solutions into viable local businesses and (ii) tailor these services (clean water, renewable energy, etc.) to the customs and financial capacity of the local population.  Building entrepreneurial ecosystems to support these local entrepreneurs should be the next priority task for entrepreneurial ecosystem builders. Without these ecosystems, neither the Millennium Development Goals nor the post-2015 Sustainable Development Goals will be achievable.

Fortunately, some interesting work is taking root in precisely this area.  In India, for example, the World Bank’s Development Marketplace is striving to build entrepreneurial ecosystems that can nurture “ non-state providers of basic services” such as clean drinking water and rural microgrids.   Also in India, the Lemelson Foundation and others are supporting Vilgro, “an Indian non-profit organization that incubates, funds and supports early stage innovative social enterprises that impact the lives of India’s rural poor.”  In the Maghreb, GIST is sponsoring a Green Start Up Boot Camp for 35 Moroccan and Tunisian green entrepreneurs.  And in Africa, Asia, and the Caribbean, the infoDev network of Climate Innovation Centers are sponsoring boot camps and other activities designed to build entrepreneurial ecosystems that will support the development and deployment of green technologies developed by local innovators and entrepreneurs. 

These and the many similar programs that were not mentioned here are modest, but essential, first steps. However, the key to sustained sustainable development and shared prosperity will require finding ways to scale up these programs so that they extend to many more countries, regions, and villages.

Note: If you know of additional programs, please post additional information in the comments section, including the website address and other salient details. 

1 Comment
Burt Hamner link
9/12/2014 06:03:22 am

You are right that there are not enough programs supporting "low tech" hardware entrepreneurs. But that's because the realities of field testing and marketing such products extend way beyond the capabilities of any startup program. Two good guides for thinking about this:
"The Business Solution to Poverty: Designing Products and Services for Three Billion New Customers" by Polak and Warwick, lays out a detailed menu for designing products for the BoP and for commercializing them. They set a high bar: If you are not aiming for 100M people and a billion dollar business you are not going to "move the needle". http://businesssolutiontopoverty.com/

The PATH Commercialization Toolkit consists of a combination of approaches that were successful in making health products available to low-income households. It illustrates how PATH has helped partners through the commercialization process in several developing countries. http://sites.path.org/commercializationtoolkit/

Startup assistance models have generally settled around the "lean startup" approach, and one program seems to be successfully franchising its model: http://kick.fledge.co/ is a 10 week program in a dozen cities now. It's a spin-off of the Fledge incubator for "conscious companies" www.fledge.co

The Cleantech Open is expanding globally. It's the biggest cleantech competition in the world and water, power, sanitation etc are the focus. They have incorporated the Lean Startup model through partnership with www.launchpad.central, a great new tool for building a business. www.cleantechopen.com I am competing in this contest now with my company www.hydrobee.com

Finally, another resource is the global Impact Hub network http://www.impacthub.net/ These 54+ co-working spaces, many in developing countries, are targeted to social entrepreneurs and can be a base for new efforts.

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    Alfred Watkins is Chairman of the Global Solutions Summit.  He worked for more than 23 years at the World Bank, specializing in technology transfer to emerging markets.  He worked extensively in Europe and Central Asia, Southeast Asia, Africa, and the Middle East.

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