Kaitlynn Pimentel
March, 2023
Defining Poverty
The Dictionary’s definition of poverty is: “the state of being extremely poor.” In addition, when you google the word “poverty,” the internet generates photos of skinny children covered in dirt holding out empty food bowls. These simplified and undignified depictions of poverty lead people to believe that poverty reduction is a matter of money, when in reality, wealth is only one dimension in the complex apparatus of global poverty. The first Sustainable Development Goal (SDG) developed by the United Nations (UN) is: “End poverty in all its forms.” The international poverty line is $2.15 USD per day, and the UN aims to ensure that nobody is earning an income below that amount (World Bank, 2022). The specific targets of the goal include creating social protections for the poor, ensuring access to resources and financial services like microfinancing, and the implementation of policy based frameworks that are also gender-sensitive (United Nations, 2022). What I am trying to prove is: Money alone can not solve poverty, but knowledge and resources can. Today, scholars are beginning to understand poverty through a different lens as “a multidimensional concept focusing more on socio-economic dimensions than being a mere measure of financial deprivation,” (Khan et al., 2014). These dimensions could include a community’s isolated location, non-existent transportation options, and crumbling infrastructure; therefore, any solutions to poverty must aim to improve all of a communities problems simultaneously. So how do we combat the various and complex dimensions of poverty? I believe that we don’t. Instead, we should help communities gain the resources, funding, education, and protections they ask for so they can combat poverty on their own.
Complex Interventions
Hisrich, (1990) defined an entrepreneur as “someone who demonstrates initiative and creative thinking, is able to organize social and economic mechanisms to turn resources and situations to practical account, and accepts risk and failure.” I agree with Hisrich, and to put it more simply, I believe that an entrepreneur is someone who recognizes a problem, and takes a risk to turn it into an opportunity for positive change. Notice that the words “profit” and “business” are missing from both Hisrich and my definitions. If we, as developers, programmers and philanthropists, want to solve systemic inequality and poverty in a community- then we need to look at all of the problems. Banks (2014) explained that economic issues in developing regions can be “rooted in systemic issues such as household poverty, high levels of physical, emotional and sexual violence, negative stereotypes of young people as lazy or criminal and a lack of inspirational role models.”
To address all of these issues, organizations must understand and come up with creative solutions to complex and systemic problems.
One exceptional organization that does this well is: The Adventure Project. The organization dedicates themselves to providing entrepreneurship and specific job training so that communities in Sub-Saharan Africa are able to rely on trained professionals to handle crucial matters like clean water wells, irrigation for crops, childbirth, and more. The organization has helped create 2,747 jobs in 6 countries, and improved food access, sources of safe drinking water, health care, and the local environmental condition for 2.1 million people (The Adventure Project, 2022). By offering job training and/or entrepreneurship education, micro-loan options, and financial literacy classes- The Adventure Project has formed alliances with communities to help them implement long-lasting systems of self-reliance.
Another NGO implementing data-driven Entrepreneurship interventions is: Village Enterprise. They work in Mozambique, Republic of Congo, Ethiopia, Kenya, Uganda, Rwanda, and the Democratic Republic of Congo. They have 200 local African employees on the ground implementing a “entrepreneurship graduation program” in which participants are given knowledge, leadership training, startup funding, group business savings accounts, and a mentor. Most notably, Village Enterprise focuses specifically on women and youth in Africa with 82% of their program participants being women business owners (Village Enterprise, 2022).
They recognize that women are disproportionately victimized by poverty, as stereotypical gender-roles make women more likely to do unpaid domestic work. According to UN Women (2022), “in all regions of the world, female poverty rates are higher than male poverty rates.” Theory of Change for the organization predicts that giving community members training, seed money, and financial literacy education will result in more businesses which will create higher household incomes and savings accounts, which will increase the global standard of living and end extreme poverty. The NGO is currently undergoing a series of evaluations working with Innovations for Poverty Action to further measure the effectiveness of their model.
Developing Communities Receptive to Entrepreneurship
These programs would be especially applicable to developing communities, because most individuals are already entrepreneurs- and additional training can offer a hand up to improve the success of their business! The graph below, provided by Yoonyoung Cho (2015) at the IZA World of Labor, represents the results of a labor survey taken from 74 developing countries. Entrepreneurs are considered to be within the segments of “Agriculture,” “Own Account,” or “Employer.” From analyzing the graph, we can deduce that about 60% of the labor surveyed are already entrepreneurs with the highest rates of entrepreneurship existing in Sub-Saharan Africa, East Asia and the Pacific, and South Asia. With this in mind, programs for entrepreneurship training would likely be well-received as individuals are already building their own SMEs (Small-Medium Enterprises) out of both necessity and ambition.
One reason that entrepreneurship is so common in developing nations is the fact that growing nations typically have youth bulges- when the population of youth is greater than the population of grown adults. Today the world is home to the largest generation of young people in history – “1.2 billion people and close to 90 percent of the world’s youth live in developing countries” (UN, 2023). Entrepreneurship can be a tool to decrease the unemployment rate in these countries where the amount of young people is larger than the jobs available to them.
Conclusion
Entrepreneurship training is needed in developing countries both to reduce the unemployment rates, and to improve the existing businesses in developing regions. Programs like the Adventure Project and Village Enterprise bring new prospects into communities and allow for individuals to create a better quality of life for themselves. It is vital for organizations to utilize a holistic approach to entrepreneurship that includes access to financing, different markets, and education to address mental health issues, gender inequity, and violence. Going forward, I think it would be interesting to look into the different resources offered by different projects, as well as programs in South East Asia or Latin America.
Sources:
Banks, Nicola (27 Nov, 2014). Why Entrepreneurship Alone Can’t Alleviate Poverty. World Economic Forum. https://www.weforum.org/agenda/2014/11/why-entrepreneurship-alone-cant-alleviate-poverty/
Cho, Y. Entrepreneurship for the poor in developing countries. IZA World of Labor 2015: 167 doi: 10.15185/izawol.167
Khan, A. U., Saboor, A., Hussain, A., Sadiq, S., and Mohsin, A. Q. (2014). Poverty assessment as a multidimensional socio-economic concept: The case of the Rawalpindi region in Pakistan. Asia Pac. J. Soc. Work Dev. 24, 238–250. doi: 10.1080/02185385.2013.844724
Hisrich, R.D. (1990) Entrepreneurship/Intrapreneurship. Am Psychol 45(2), 209–222
UNESCO (31 Jan, 2023). Thematic Fact Sheet Youth and Empowerment. https://www.unesco.org/en/youth-and-empowerment
United Nations. (n.d.). Goal 1 | Department of Economic and Social Affairs. United Nations. Retrieved February 23, 2023, from https://sdgs.un.org/goals/goal1
UN Women (01 Feb, 2022). Poverty Deepens for Women and Girls, According to Latest Projections. https://data.unwomen.org/features/poverty-deepens-women-and-girls-according-latest-projections
Village Enterprise (2022). Our Impact. https://villageenterprise.org/our-impact/
World Bank (2022). Fact Sheet: An Adjustment to Global Poverty Lines. https://www.worldbank.org/en/news/factsheet/2022/05/02/fact-sheet-an-adjustment-to-global-poverty-lines#1
