By Maggie Bohlander and Ricky Chen
With every holiday season, we have witnessed that annual ritual of families and friends gathering to watch those heartwarming yuletide films, Love Actually, It’s a Wonderful Life, and A Charlie Brown Christmas. One that may not get so much play time is John Landis’s Trading Places, a dark 1983 social comedy starring Eddie Murphy, Jamie Lee Curtis, and Dan Aykroyd.
In the film, two ageing millionaires, the Duke brothers, engage in a bet over whether — given the right environment and upbringing — any disadvantaged person can blend in as a member of America’s upper echelon. Or whether, on the other hand, given the wrong circumstances, a member of the 1 percent can fall off the social ladder as easily as the disadvantaged can climb it. This is the timeless debate: nature vs. nurture.
The same debate plays out in entrepreneurship. Are entrepreneurs born or are they made? Why do some countries boast many startups and small- and medium-sized businesses while others do not?
Govinda explains the merits of a high-end cookstove to a potential customer. (Photo: Think Africa Press.)
The adjective “unskilled,” like many words favored by economists, can be highly misleading. Trying to survive on the streets in a Kenyan slum, for example, takes a lot of skills — just not ones that are easy for the market to value and reward.
Take Alex Govinda, for example: as a homeless youth in Kwangware, on the outskirts of Nairobi, he had to hustle every day just make enough money to eat, collecting and selling scraps — and sometimes stealing shoes or mobile phones, too. Now he is an expert salesperson, using his skills to hawk high-quality goods to his neighbors and earning a decent living in the process, thanks to a unique arrangement set up by an American NGO called LivelyHoods.
Govinda’s situation — and the solution LivelyHoods came up with to solve it — are a perfect illustration of the institutional forces holding millions of poor people around the world back to from reaching their true potential.
Entrepreneurship plays a key role in every economy on earth, whether they are sanctioned or not (even in North Korea!) By innovating, providing jobs and creating wealth, the businesses that these entrepreneurs build play a huge role in the development of the economy.
But what makes some places more successful than others in encouraging start-up and risk-takers? Well, it has everything to do with the “entrepreneurship ecosystem.”