What builds a successful ecosystem to support entrepreneurship development? The concept of focusing on enabling environments is a global concerns for development practitioners and complementary to efforts to support entrepreneurs individually or in groups. The Aspen Network of Development Entrepreneurs provides a diagnostic toolkit for development practitioners to assess entrepreneurial ecosystems. Access the complete toolkit here.
A recent report from the World Economic Forum also details similar contextual challenges and opportunities that entrepreneurs face to launch and sustaining their businesses. The importance of access to markets, human capital and financing constitute a trifecta of priorities for budding entrepreneurs. Find the report here.
After my recent research into community economic development in Atikokan and Siene River First Nations (Ontario) in September, my travels will take me to Ely, MN this month to discuss similar economic potential with business and community leaders. Like so many other rural communities, this small rural community on the doorstep of the Boundary Waters Canoe Area wilderness managed by the USFS is at a crossroads of an aging demographic and lower patronage rates to the park resulting in fewer tourism dollars. Sulfide mining presents an opportunity both in terms of jobs, increased local business growth and a future for youth so that they may stay in the area. . It is a chance for communities, similar to Atikokan to survive. A central question that I will continue to explore in future posts is whether extractive industries are the only option for a community’s survival, particularly for the retention of its youth or other options available such as expanding environmental tourism or a blend of both? Check out a couple rural perspectives in these links here in Ely and MN
As the summer hiatus is winding down here in North America, I finished up some business and vacation travels that took me from the Midwest through parts of southern Ontario and Quebec into New England. What strikes me most when I pass through some of these small communities is their proximity to nearby tourist destinations and how little some have appeared to benefit economically from this. I wondered what sustainable community development from an economic perspective looks like if towns don’t benefit from these typically large “revenue-generators”. Where is the intersection of tourism and sustainable community development located and what does this symbiotic relationship look like? There are several perspectives and resources accessible here that can provide some intellectual momentum for finding these complex solutions.
Does rural economic growth differ depending on where you are or are the principles applicable everywhere? Last week I trotted up to Ontario to visit our neighbors to the north and begin an informal survey of some local communities in southern Ontario that include nearby First Nation communities. Does rural development, economically-speaking look the same as it does States-side? What constitutes sound, sustainable rural development for a community such as Atikokan for example? Is it different for this tiny rural town, nestled in the rugged, timber-covered lands on the northern boundary of Quetico Provincial Park in southern Ontario than one of its First Nation neighbors such as Seine River? Are they both dependent upon the tourism industry to bring visitors and their purchasing power or is the key to economic development the extraction of precious metal mineral resources such as gold deposits identified just 23 km north of Atikokan in 2009? Or does it come from Canadian provincial government intervention programs such as RED(LINK) to create entrepreneurship via local partnerships in technology, social enterprise and cultural? Is there a happy medium? What avenues exist for geographically-isolated First Nation communities such as Seine River with limited local assets such as a health center, education facility and a community center? This survey will look to tease out key factors in the coming months that these local communities can leverage to revitalize and strengthen their local human capital to link to regional and national economic growth and ultimately answer the question of what works best in rural economic development for these isolated communities?
I sat in on a webinar, Creating Green Jobs for Low-Income Individuals in late March on green job creation at the base of the pyramid (hosted by Jason Friedman, Friedman & Associates) and I was pleasantly surprised. I am a public skeptic (and a closet-optimist!) when it comes to green enterprises and green economy which seems to need subsidies and lots of public goodwill to make a go of it in today’s competitive business world. Green enterprises are nice to talk about but will they ever be profitable and achieve a dent on local economies or create local wealth for communities? Cue two community development non-profits, on opposite coasts of the US that are profitable, create local jobs, serve a substantial client base, and reverse environmental degradation. Too good to be true? Terry McDonald, Executive Director, of the St. Vincent de Paul Society (SVDP) in Lane County, Oregon (near Eugene) doesn’t think so. And he should know because SVDP serves 84,000 clients yearly and hosts no-less than 3 profitable green businesses. One of SVDP’s businesses, a recycled glass company, Aurora Glass realized approximately $1 million US in total yearly sales and employs 25 staff. On the opposite coast, Greater Bridgeport Community Enterprises, Inc. (GBCE) works to create profitable green enterprises in the local communities of Bridgeport, CT. Adrienne Farrar Houëll, Executive Director explains that GBCE launched The Green Team, an environmentally-friendly construction company and Park Green, a mattress reclamation and recycling company less than a year ago. Although in relative infancy, the two green enterprises have already created a total of 33 new jobs in the green sector. GBCE intends to build upon these accomplishments with the goal of creating 100 new jobs in 2-3 new green profitable businesses over the next 4 or 5 years. My skepticism for sustainable green enterprises continues to erode as I watch them grow!
In an effort to increase financial inclusion under a 2005 federal law, the FDIC is attempting to bring more of those excluded or under-included back into the formal banking financial system in the US. A 2011 survey published last fall by the FDIC and US Census Bureau found that unbanked households in the US rose slightly by 821,000 over a two-year period. In fact, the survey found that nearly 1 in 4 of all households in the US were found to be unbanked or under-banked, defined as anyone in a household who doesn’t have access to some type of bank account or any accounts at all. Many turn instead to non-mainstream options such as payday lenders or non-bank money-orders to meet their financial services needs. In the US, minorities are disproportionately excluded with as many half of minority households reported to be unbanked. Financial inclusion is not new or limited to the US. The estimates may vary worldwide, however as recently as 2012 the World Bank calculated that 2.5 billion adults remained unbanked or underserved although defined more broadly as “no access to any formal financial services, products or institutions”. With the linkages between access to financial services and poverty, even a savings account provides a route to economic stability for many poor households and a potential path out of poverty.
An interesting change to food aid to be proposed by the Obama Administration in its 2014 budget involves a restructuring of a 60-year practice in food aid for developing countries. Instead of distributing food from the US, the change would permit food to be purchased locally or provide grants directly to charitable agencies for their humanitarian programs. An interesting debate that has been brewing around this issue for many years centers on US-agriculture global competitiveness versus the crowding out of local farmers. It is no doubt that food aid is a big business and that food is desperately needed. In 2012, the USDA alone estimated that its food aid programs would benefit approximately 9.7 million people worldwide. From 2006-10, the US shipped an average of 2.7 million metric tons of food at an average cost of $2.4 billion/fiscal year, largely (73%) to respond to emergency and relief needs. The GAO issued findings on food aid effectiveness in a 2011 report that stated food aid cost the US government an additional $219 million over a 3 year period (2007- 2010). This was due in part to inefficient monetization, the term used to describe how aid agencies sell US food commodities overseas to get funding for their programs. The GAO study recommended closer market price monitoring by USAID and USDA and reducing maritime shipping costs (a third of overall food aid costs) by increasing competition to reduce this loss. What will be interesting to watch as this debate unfolds is whether the US government, private sector, and the humanitarian community can reform food aid in a meaningful way to more effectively address poverty and other root causes to world hunger. Watch this space for more news.
Crowdfunding platforms are becoming the rage as entrepreneurs and individuals with a creative flair search for typically small-scale financing options. Imagine you are an individual entrepreneur with a great idea or a local project with real potential for social impact in your community but no money to get it going. Or a charity that needs to go beyond its traditional and fatigued donor base to expand its outreach in its community to just a few more poor households. What do you do? You turn to what is known as a crowdfunding portal where you upload your story, even a photo or two, and socially-minded individuals, anywhere in the world can read your story and send you the capital, piecemeal and small-scale to get going. Kickstarter or Indiegogo, the successful leading sites have spawned a “crowd” of new crowdfunding sites, as Inc. magazine reports. Newcomers such as Microryza, Petridish, and Iamscientist now provide a way to raise money only for scientists and scientific research. Razoo and GoFundMe works their magic for charities and nonprofit organizations. exclusively. Cause to Fund and ioby specialize in the local community impact projects, such as homeless projects, community gardens and neighborhood clean-ups. Read the full article here.
Youth entrepreneurship has become paramount for the stability and economic advancement of many countries. The demographic shift in developing countries in particular has produced far more youth than older adults. An ILO report on global youth employment estimated in 2012 that there were 1.8 billion youth in the world with more than 75 million ages 15-24 struggling to find work. In many regions of the world, the future of a country’s economy lies in getting youth to think of entrepreneurship as an option. In the Arab world, Qatar apparently is leading the way. The country posted the highest rate of youth that expressed an interest in becoming an entrepreneur as compared to its neighbors in the region. The Silatech Index report, Qatar’s Rising Entrepreneurial Spirit found that Qatari 33% of youth reported their intention to start a business in the next 12 months which continues an increasing trend since 2009. Compare this result to the median figure of 9% across the rest of the Arab world and it demonstrates a clear difference. The US by comparison in 2012 had a stable trend of 43% of youth between grades 4 through 12 (10 – 18 yrs.) who wanted to start a business according to a Gallup survey. Many factors obviously are necessary to encourage this spirit of entrepreneurship in any country. Still these figures are encouraging as youth’s enthusiasm for entrepreneurship is rising, giving hope for future economic prospects.
The New York Times’ David Bornstein thinks so. Apparently so does Warren Buffet. His MidAmerican Energy Holdings Company floated a first-ever $850 million bond offering for Topaz Solar Farm, a U.S. photovoltaic power project — which was reportedly oversubscribed by $400 million. The article in the Times profiles Mosaic, a start-up investment start-up in Oakland, CA that rolled out an online crowdfunding platform for small, non-accredited investors to pony up as little as $25 for solar investments for a 4.5% return. The star-tup raised the $313,000 in 24 hours instead of the 30 days the firm had projected.
Solar energy has become an increasingly cost-effective option. The article cites reports that innovations in solar panel technology and manufacturing has dropped the retail price of panels by 80% over the past 5 years. This development and other key strategic partnerships have allowed First Solar, a solar energy generator to provide power to El Paso Electric, a Texas utility at around half the price per kilowatt as compared to coal-burning power plants. Is Solar energy finally coming of age? If it hasn’t already, it appears to be on a horizon that is fast approaching. Read the entire NY Times article here.