Enterprise UK Blog

Thought I’d make quick post about one discussion topic in particular from a mini think tank I attended in Berlin this weekend. The topic: sustainable development in the world’s least developed countries.

There was just a little bit of a clash between free-marketing economists and the more idealistic (if ever so slightly less practical) members of the think tank who focused on social cohesion. I’ll let you guess which camp I fell into with the help of these clues: I usually read the Guardian, my favourite hobby is knitting organic muesli for disadvantaged and socially excluded members of the community, and, aside from the fact that I can’t count, I’m not fully convinced that The Market even exists.

As well as direct aid, investment, trade and regional integration, entrepreneurship was a big topic at the think tank. Somehow, we ended up talking as though it’s only possible to focus on either microenterprise or big, international investment. Obviously it’s possible, and best, to have both. But here’s a very basic summary of the argument from the anti-microenterprise faction:

“Microenterprise might be useful for giving the population in developing countries a sense of agency. But economically, its effects are minimal. Enterprise will never lift the developing world out of poverty. Only major investments from globalised companies can give these economies the boost they need to become competitive.”

As things stand in many of the least developed countries, this is unfortunately true. But I still firmly believe that enterprise can help developing countries grow and diversify their economies and foster social cohesion by creating new opportunities. The issue at the moment is that there is very, very limited scope for microenterprises to grow into small and medium enterprises. Access to capital and technology is exceptionally limited, besides the fact that political instability hampers growth.

If you’re bringing in big bucks from Europe, supporting enterprise within least developed countries is even more vital if you aren’t going to turn them into European factory outposts. Certainly a great deal of work needs to be done in terms of improving financial services and developing institutional stability, but there’s a danger of microenterprise being labelled a tiny tool for social engineering, not a major socio-economic one. Microenterprise could potentially play a not at all micro role in growing a strong, sustainable economy.

My understanding of this topic is fairly basic – I tend to go in shouting about principles and equality and opportunities, instead of tariffs and revenue. But I was lucky to be part of a great discussion group in Berlin, and I think we came up with a very solid policy paper.

In other, less enterprise-related news, this Christmas market is beautiful.

This entry was posted on Thursday, December 11th, 2008 at 11:47 am and is filed under Global Entrepreneurship Week. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.