Entrepreneurship and Development

Entrepreneurship and development:

This weeks theme was important. We had the opportunity to look practically at how we can actually bring our people out of poverty and give Africa a competitive advantage in the world economy through entrepreneurship and development. We have already seen this in South Africa too, the expansion of the middle class, not only via employment in the private sector, but also through the entrepreneurship, however limited its innovation, that has emerged in the last 15 years.

We can directly impact unemployment and tackle some of the challenges that face sub-Saharan Africa. We can do this via social entrepreneurship commonly defined as using an enterprise that addresses social issues using the concept of entrepreneurship. This includes profitable mainstream business that subsidies NPOs or businesses whose core business is to be profitable in addressing a social issues. This finds the middle ground between doing good, which we all want, making money and innovation. I feel it worth while to pull out a note I wrote last year on the subject of social entrepreneurship, as it is relevant to most of the themes this week

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The Entrepreneur of the Developing World in the 21st Century


25.5% of all South Africans between 15 and 65 are unemployed. 9.6% of Argentina is unemployed. 3 billion people in the world live on less than 2.50 a day. The GDP of the 41 poorest countries is lower than the wealth of the 7 richest people in the world.

Clearly the world is in a state. This is the not sustainable. The world is not and cannot continue to sustain itself and remain indifferent to the suffering of the large masses of our people across the world. Business, commerce and industry then has an inherent, albeit unfair, but an expected contribution to the world. Not just to provide products and services that improve our lives, but to concentrate their strength and efforts on the alleviation of global poverty through sustainable entrepreneurship. Business can no longer view the problems of society and be indifferent towards them. The corporate world can no longer go about their daily business without thinking of the massive responsibility we have. The winds of change are moving within the developing world. The developing world is beginning to understand that we will take ourselves out of poverty, and we will only do so through sustainable enterprises, social business, social entrepreneurship and responsible business. Africans have an expression, Ubuntu. It means, I am because you are, much different to the French philosopher who once argued that I think therefore I am, we believe you are who you are because of the people around me, because of society. Your value is in enriching the lives of others.

Whilst the philanthropy is no doubt charming, and idealistic, the reality is that with money comes power, with power comes greed, with greed comes corruption. Hence the need to ask whether or not humans are inherently greedy, like Adam Smith once argued. Does the pursuit of self eventually lead to the betterment of society? The truth is that both systems have failed. Pure business interests have failed with the collapse of Wall Street, and the fall of soviet rule has resulted in the lack of confidence in the communism system. I believe that any business in the 21st century should measure its effectiveness and success through these 2 basic criteria. Social change, and environmental sustainability; these should be the core objectives of any business in our time.

“I am arguing that the new order, born of the victory in 1994, inherited a well-entrenched value system that placed individual acquisition of wealth at the very centre of the value system of our society as a whole.” Former South African State President Thabo Mbeki.

At a Nelson Mandela Memorial lecture, Mbeki argued that society had made a mistake by centring human value and human dignity in the possession of material wealth. Human dignity should stem from your individuality and your contributions to the development of others. That is the true spirit of Africa and our people. Therefore all business and enterprise must have that social aspect encoded into its DNA. The need to have a social impact or social change for business is important. Case in point: In Nigeria, there was a lack of public toilets and this was causing sanitation issues and health concerns. A Nigerian man on route to South Africa discovered portable toilets that South Africans traditionally use for funerals. He bought these toilets and set them up in Nigeria. He approached some street kids and agreed to go 50-50 on the profits if the kids maintained and managed the toilet businesses. Today he is a millionaire, and has empowered many lives of Nigerian children who otherwise would have resorted to crime. The Drive to make a positive contribution to society through enterprise is important and presents many opportunities for development, if people would use them. This leads me to the definition of a social enterprise: An enterprise driven by the need to meet two fundamental objectives: the commercial objective and a social objective. (http://www.schwabfound.org/sf/SocialEntrepreneurs/index.htm, 2008). This means that these businesses will and should make profit, and yet drive social change.


No business can continue to consider CSR to be adequate in responding to the challenges of society, particularly in the developing world. CSR must no longer be used by corporations and multinationals to avoid public scrutiny. It has been proven time and time again that the 1st budget to cut in a time of crisis is CSR. Companies must actively engage in community development. They must commit to creating sustainable empowerment opportunities. The challenge would be much better taken up in the global context, but it is imperative that the developing world internalise it. Multinationals operating in the developed world, using their resources and cheap labour, exploiting their mineral wealth and abundance in natural resources must not be allowed access, particularly privatised access to natural resources. Unless they commit to a sustained social development programme that significantly changes the lives of people in the developing world for the better. The economics of the developing world demand that our economic growth and development be collective, the model of the pursuit of individual interest is neither applicable nor sustainable in this context.

Varkey George is the director of Shawco (student health and welfare organisation) and a lecturer on social entrepreneurship in the University of Cape Town. This organisation provides student volunteer assistance to the many South Africans suffering through illiteracy, hiv/aids, and many others that have plagued the continent. Shawco sends university students to teach basic maths and sciences to high school kids to equip them for University. They offer free medical advice (health sciences students). Varkeys Job is to keep Shawco sustainable. They realise that Donor funding is unreliable. And cutting it off will cause the programmes to stop and the poor will suffer. Through Varkey, Shawco now uses their bus fleet as transport for churches and schools when they are not transporting volunteers, they have a house they rent to international students and have a programme called rags to riches where they request donations from students and empower women in the township to sell these at mark up prices amongst other business interests they have. Through entrepreneurial; and business efforts, Shawco raise R8 million a year. That Synergy is what is critical for the success of the modern socially responsive entrepreneur.

Further, the modern entrepreneur must always be thinking green. The industrial revolution brought with it many joys. Mass production and manufacturing meant we could feed and sustain more life on earth. What was not anticipated was the heavy reliance of that manufacturing of food, the transportation system and other fundamental aspects of modern human life on fossil fuels. The world is now going through global warming and it is unlikely that our children’s children will experience the same quality of life which we have been privileged to experience. The modern business and business man, particularly from the developing world has to be environmentally conscious. As Africans in particular, our relationship with the environment has always been one of respect. Colonialist thought we were uneducated for not developing, building sky scrapers and cutting down our trees, but our elders have always known and understood that there exists a balance between us and the environment that should not be disturbed. Disturbing it would have disastrous consequences such as the extinctions of species, the scarcity of water and so forth. Therefore, every entrepreneur in the developing must go green. Not as a matter of compliance but as a matter of principle. Business must respond to the environmental challenges, Copenhagen 2010 urged business to do so.

Above the principled argument to going green, there is economic interest in green technology and green fuels. Developing countries must take advantage of this. The world bank recently loaned South African Parastatal 3.75 billion US dollars to build power plants that will see some 80% of South Africans gain access to electricity (http://news.bbc.co.uk/2/hi/8609179.stm, 2010), a good 475million US of that money must be invested in developing renewable energy such as solar and wind energy. Another significant proportion must be invested in funding South Africa’s PBMR nuclear programme. Evidently, if the were any business people in South Africa, whose companies were focused on green technology business would be booming now. The developing world must not allow itself to fall behind in these developments. In the next 75 years, my educated guess and opinion is that coal will no longer fuel our power, and yet we have billion dollar industries built on it. As the developing world, we must be ready to move when the winds of change arrive. We must not let our moment in destiny pass us by.

Business Success in meeting our developmental challenges will require a concerted and coordinated effort. It will be realised to through citizen participation. Citizens must personalise the struggle for economic emancipation and economic freedom. People must be encouraged to start business and move to create new opportunities. The modern business must create opportunities for intrapreneurship within the cooperation so as to expand. In citizen participation, people must be trained to leave. All business must be a hub of exchanging ideas and freedom of movement. The global situation dictates that we must develop collectively, and therefore every citizen should play their part in ensuring that they contribute to the strengthening and building of the economy. The entrepreneur and businessman has a significant role to play in the alleviation of poverty.

Umuntu ngumuntu ngabantu- I am because of others. “

Once again, I continue to enjoy my experience in the programme and I am constantly learning from my peers, and the speaker that engage us every day.

I continue to find myself doing a lot of introspection about what my own role will be in the future, and what I can do to balance all the aspirations I have, including the accumulation of the capital I desire to make my childrens lives better, with doing good in the community, the country and the globe.