Social Entrepreneurship: Can entrepreneurship help to reduce poverty?
Building on the foundation from week 1, this session will give you a deeper dive into the relationship between poverty and entrepreneurship. Professor Michael Morris will have a discussion with Rock André, founder and CEO of the Center for Entrepreneurship and Leadership in Haiti. Rock will use his own experience as an entrepreneur in Haiti to help us explore how social entrepreneurship can increase wealth and resilience in communities worldwide.
- Entrepreneurship is empowerment and transformation. It has the power for the poor to create and transform aspects of life as broad as markets to an individual as their own future and families. This empowerment transformation perspective on entrepreneurship can lead to viewing it as a solution for poverty. (4:45)
- “Entrepreneurship is empowerment and transformation. The idea that the poor can create their own futures, their own jobs, their own identity, their own wealth…. Entrepreneurship can transform markets…. It can transform business practices, industries. It can certainly, from a human development standpoint, transform oneself, one’s family, one’s community.” (Michael Morris, 4:45)
- Poverty is a multidimensional problem. In terms of entrepreneurship as a solution, the factors that work against someone in poverty who is trying to start a venture can be divided into four categories, which together constitute the Liability of Poorness. These four categories are literacy gaps, a scarcity mindset, intense non-business pressures, and a lack of safety net. This Liability of Poorness affects everything. (13:20)
- “We need to educate people about how to create their own job. And that’s why since then I realized entrepreneurship, this is the tool. This is the instrument we can capitalize on to change people’s mindset and to bring this change to Haiti.” (Rock Andre, 13:20)
- “This Liability of Poorness affects everything; from my ability to adopt the entrepreneurial mindset and to plan. It affects the kind of venture I start. It affects something we call your opportunity horizon, the kind of opportunities you’re able to see, the kind of resources you’re able to access.” (Michael Morris, 15:45)
- The key to successful entrepreneurship education is teaching to develop a different mindset. Entrepreneurship means that out of scarcity, there is possibility. If people are educated in possibility thinking, they will be able to capitalize on what opportunities they have created out of it. (17:25)
- Many people question the importance of the ventures of the poor, some even argue that they are unproductive or inefficient when the opposite is true. These ventures serve market niches not addressed, enhance competition, pay taxes, stabilize neighborhoods and tend to be immersed in the fabric of their communities. At the individual level they enhance the skill and knowledge base of the entrepreneur. They play important roles from the larger economic level to the individual level. (25:42)
- The entrepreneurial ecosystem, which includes institutions, laws, and infrastructures, plays a huge role in creating the right environment for entrepreneurs to create a business. However, it is also important to note that despite all these challenges, there is always opportunity and one must not wait for the perfect conditions to pursue a venture. (29:00)
- “Despite all those challenges, there are always opportunities. There are always possibilities. Of course you would hope that things would be easier for you in order to go faster, in order to have better results, but you don’t want to wait until all the conditions are perfect in order to start something.” (Rock Andre, 30:08)
- “This issue is how you see resources that other people don’t see?… When we talk about the business community, this is a key part of the solution. The business community is not just about providing money or mentoring, businesses have resources… There are just innumerable solutions when you start thinking creatively about resource leveraging and bootstrapping and so forth.” (Michael Morris, 49:08)
The second session of The Power of Social Entrepreneurship series began with an introduction by Melissa Paulsen, Associate Director, Entrepreneurship and Education Programs and Keough School Concurrent Assistant Professor of the Practice, welcoming back the virtual community that formed last week and those that have just joined. She provided a brief recap on last week’s session emphasizing that Social Entrepreneurship is not about creating entities but about bringing a new mindset to social value creation. Paulsen then introduced this week’s topic and crucial question: Can entrepreneurship help to reduce poverty? She also reintroduced the session’s speaker Michael Morris, professor of the practice with the McKenna Center for Human Development and Global Business. Morris has dedicated his career to bringing entrepreneurship empowerment to those operating under issues of adversity. His guest speaker is Rock Andre, Founder and CEO of the Center of Entrepreneurship and Leadership in Haiti (CEDEL Haiti), which is a social enterprise that promotes the development of entrepreneurial spirit in Haitian communities.
Morris explained the format of the session, which will consist of him sharing ideas and getting Andre’s perspective on them. The first topic is how we think about entrepreneurship. Entrepreneurship has the power to empower and transform and this perspective can lead to it being a solution for poverty; a part of the pathway to poverty alleviation. Morris proceeded to explain that poverty is not a characteristic, but a circumstance for people that continues to be a severe problem in our world. He provided an array of concerning statistics in regards to poverty around the globe and drew attention to the costly and ineffective efforts throughout the world, particularly the U.S., to alleviate it. The conversation shifted to the role entrepreneurship can play in making a dent in poverty. Andre proceeded to explain his experience and what led him to entrepreneurship. He explained that after the earthquake in Haiti, he conducted a survey to determine the needs of the people during this time and concluded that 53% of people’s priority was to find a job, even over food, shelter, and basic health services. After this result, he realized entrepreneurship is the tool that will be able to bring change to Haiti.
Morris moved on to explain the multidimensional nature of poverty, it is more than just the lack of money. The challenges of this multidimensional nature can be organized into four key factors in addressing entrepreneurship:
- Literacy Gaps
- Scarcity Mindset
- Intense Non-Business Pressures
- Lack of Safety Net
This is the Liability of Poorness. These are the factors that work against an individual in poverty who is trying to start a venture. Morris delved into each of these factors and provided several examples for each. This Liability of Poorness affects everything, from their opportunity horizon to their ability to access resources. Andre explained that the LOP is the reality in Haiti and that is what they are trying to change, beginning with educating to change the mindset. Doing so allows entrepreneurs to capitalize on what they do have rather than focusing on what they don’t.
Morris advanced to discuss the four types of entrepreneurial ventures: survival, lifestyle, managed growth, and aggressive. The poor disproportionately create survival ventures, which suffer from something called the commodity trap. Andre explained how CEDEL’s mindset training helps entrepreneurs break from this commodity trap by helping them differentiate and come up with a different approach to their venture. Morris then tackled the claim that ventures by poverty entrepreneurs are unproductive and inefficient, when in fact the opposite is true. These ventures play important roles on both the broader economic level, such as serving market niches and stabilizing neighborhoods, and the individual level, by developing the knowledge and skills of the entrepreneur. Morris explained the SPODER model, which are the steps taken to combat poverty through entrepreneurship.
The conversation continued, discussing the issues of expanding the poor’s opportunity horizon which would need the development of a different toolkit, one which would consist of escaping the commodity trap and designing sustainable profit models. The discussion then led to the importance of changing the entrepreneurial ecosystem, which Andre emphasized was not in good shape in Haiti. Andre explained that even though it is important for entrepreneurs to have the right environment to create a business in their country, entrepreneurs must not wait until all the conditions are perfect to start something. He proceeded to explain the importance of their youth entrepreneurship program, and how it invests in the next generation of entrepreneurs.
Morris transitioned to discuss what is being done at Notre Dame, particularly the South Bend Entrepreneurship and Adversity Program, and goes into detail on how the program functions and how it helps the local entrepreneurs. He also shared about the new Notre Dame’s new website portal, Global Partnership for Poverty and Entrepreneurship (GPPE). Andre then delved into his new high school initiative, which exposes young students to entrepreneurship through clubs. Andre finished by describing his challenging experience returning to Haiti after university in hopes of starting CEDEL Haiti and that passion that drove him to continue. The session ended with a Q&A session that consisted of the following questions:
- How do companies help with debt equity? And if people need grant funding, how they get started or how do they overcome that?
- Specifically within the U.S. context or within Haiti’s context, what are things that would help catalyze this entrepreneurial ecosystem?
View the discussion recorded on Wednesday, February 17, 2021, with Michael Morris and guest speaker Rock André.
Listen to the discussion wherever, whenever, on The ThinkND Podcast: