In his famous TED talk “Plutocrats, Pitchforks are coming”, the billionaire venture capitalist Nick Hanauer says “Capitalism works by effectively creating new solutions to human problems.” Meaning the capitalist system works by enabling anyone within a society to create solutions to existing problems, and awards the creator. Therefore system provides incentives to coming up with solutions for problems we face in society.
Does the same principle applies to underdeveloped countries, is a question one might ask; whether all the challenges in these countries are also opportunities awaiting for people with entrepreneurial mindset. There’s no reason to believe that the challenges in the third-world countries are any different from challenges that more advanced countries once faced in the past. The services and commodities we now enjoy in developed countries were not always there. They were developed or invented by people who realized the population needed them. And they could sell these services or products for a profit. Developing the third-world countries won’t be any different.
It’s important that we now start discussing the economic potential, the financial incentives lie behind solving the problems, instead of the hopelessly discussions and constant flow throwing foreign aids. According to a report released by the Multilateral Investment Guarantee Agency (MIGA) in 2014, between 2006 and 2011, the average rate of return on foreign direct investment in challenged economies was as high as 14.5%. That is far above the global average of 6.2%.
Learn to adapt to the environment
It would be inaccurate to say that someone can just start a business in a third-world country and will start making a profit. Due to lack of infrastructure, an entrepreneur in a developing country has to be creative to be successful. Nonetheless, economic opportunities exist anywhere, one just needs to learn to adapt to the environment. The founder of Irokotv in Nigeria, Jason Njoku, said when he started he quickly realized that he had to adopt a third-world entrepreneurial mind-set. Otherwise, he would not have succeeded.
About 5 years ago, three individuals from a Haitian family living in the United States realized that, despite being an island in the Caribbean, eating fish in Haiti is somewhat a luxury. The locally caught fish is expensive, and what the average population can afford is usually imported from the Dominican Republic or other nearby countries. They decided to start an aquatic farm in Haiti to raise hormoneless tilapia to make available to the local population. They started Taino Aqua Ferme. Now the farm has an annual production of more than 300 tons of fish made available to the Haitian fish market.
In October 2014, Chris Kwekowe, a 23 year old computer science graduate from Lagos, Nigeria turned down a high paying software engineer position at Microsoft to start Slatecube. The startup specializes in training and internship placement for Nigerian college graduates. According to surveys, of the annual college graduates in Nigeria about 45 percent remain unemployed. The main reasons employers often reject graduates is for lack of professional skills; critical thinking, entrepreneurship, and decision-making.
Slatecube offers virtual internships in courses ranging from corporate finance to anger management. Once a candidate completes a course in their chosen discipline, he/she is paired with a company for a virtual internship. Slatecube has worked with companies such as Cisco and accounting firm Grant Thornton.
In an interview with Newsweek, Chris Kwekowe said “If you can do business in Lagos, you can do business anywhere in the world. The struggle is real here.” The struggle is real in any third-world country, but so does the possibility to make anything happen.
Time to adjust our view of developing economies
When I left Haiti in 2000 for the United States, to make an international phone call, one had to go to the city to what we then called a Teleko early in the morning, wait in line until it was your turn to use the booth to make the call. Now people call me while in their farms in different corners around the country.
Something happens on one continent, it can impact the social, economic and political dynamics of the entire globe for months, even years to come. People are running multi-million dollar businesses from their laptop while traveling from one place to the next. What a lot of us are failing to realize is that the world has gotten a hell lot smaller and more connected than ever before. Technology is developing and changing our cultures at rates we can barely keep up with. Now is the time to revise our view of the underdeveloped economies, to stop seeing them as being stuck in time. But rather to think of them as places with opportunities that can be leveraged using our current technological and economic advantages, all while pushing these countries forward.